Strata Sprinkler System Coverage Under New Home Warranty
In The Owners Strata Plan 4249 v. Travelers Insurance Company of Canada, 2018 BCSC 114 the BC Supreme Court provided some useful guidance for strata corporations and the insurance community on the scope of coverage under a new home warranty certificate. In this case the court had to determine if a “severe deficiency with respect to the building fire sprinkler suppression system” in a 2011-build, 33-storey residential tower in Vancouver was covered by the new home warranty certificate issued by the defendant Travelers as a warranty provider under the Homeowner Protection Act, S.B.C. 1998, c. 31, the Insurance Act, R.S.B.C. 2012, c. 1 and related regulations.
The dispute was over whether the sprinkler system was part of the “Common Property” which had a 15-month warranty (that would have been out of time and therefore not covered under the June 2013 claim) or part of the “gas, electrical, plumbing, heating, ventilation and air conditioning delivery and distribution systems” that would be covered under the 2 year Materials and Labour defects warranty.
The analysis of the competing interpretations of the new home warranty and the determination of coverage required close reading of the warranty document, the Strata Property Act, the legislation mentioned above in accordance with basic principles of statutory interpretation. Ultimately the court found that even though there was no dispute that the sprinkler system fell within the definition of “Common Property”, as the essence of the sprinkler system was the delivery and distribution of water through pipes it was sufficient to bring it within “plumbing delivery and distribution system” and within warranty coverage for defects in material and labour.
Case summary by Caroline Alexander