August 27, 2020 - The Province of BC has changed the Strata Property Act and the Financial Institutions Act in response to the recent escalation of insurance premiums and deductibles. In a communication to Strata Managers, the Real Estate Council of BC (RECBC) highlighted that now:
- Strata corporations are required to inform owners as soon as it is feasible of any material change in the strata corporation's insurance coverage, including increasing deductibles; and
- Strata corporations can use their operating fund or contingency reserve fund to pay for property and liability insurance required under the Strata Property Act or the strata corporation's bylaws without a vote of owners if there are reasonable grounds to believe that an immediate expenditure is necessary to obtain the required insurance.
RECBC also noted that more changes are in the works and advised real estate professionals to refer to the updated insurance web page on the government's strata housing website for further details.
BCREA Continues to Advocate on Insurance Issues
The dramatic rise in insurance premiums and deductibles experienced by many strata properties and owners is an issue of significant concern to BCREA.
The need to find a solution is urgent, but there are no quick fixes on the horizon. The issues are complex, ranging from high claims ratios and our ever-present risk of earthquakes, to insurance companies vacating the BC market and poor maintenance practices. For the approximately 1.5 million BC residents who are strata residents, and any potential purchasers of condominium units, this crisis creates risk and uncertainty.
We have engaged with the BC Financial Services Authority with our recommendations (viewable in this previous blog post), and continue to advocate for further actions by government to ensure better availability of insurers in the market, and improved education and training for strata councils.
courtesy of British Columbia Real Estate Association