Strata Insurance Update

For several months, BCREA and other stakeholders have drawn the government’s attention to significant increases in the cost of strata property insurance in BC. This is a complex issue and, while it can’t be solved quickly, actions are underway.

Initial research findings
The BC Financial Services Authority (BCFSA), BC’s financial services regulator, published a brief interim report in June on the causes of significant increases in strata insurance. These are some of the key findings:

  • Looking at both large and small stratas, premiums have risen on average by approximately 40 per cent across the province over the past year while deductibles have increased up to triple-digits over the same period.
  • Price pressures will continue and there is not enough capacity in the strata insurance market to support future expected demand.
  • Insurers are incurring losses mostly from minor claims due to poor building maintenance practices, initial construction quality issues, building material changes and rising replacement costs.

The BCFSA is consulting with stakeholders – including BCREA – and plans to publish its final report in the fall.

Legislative changes
During the summer session, BC MLAs passed the following legislative amendments as the first step to address strata insurance concerns:

  • Add insurance information to the Form B Information Certificate (recommended by BCREA).
  • Strengthen notification requirements by insurers to strata corporations of changes to insurance coverage and costs, or an intent not to renew (recommended by BCREA).
  • Require strata corporations to inform owners about insurance coverage and provide notice of any policy changes, including increasing deductibles (recommended by BCREA).
  • End the practice of referral fees between insurers or insurance brokers and property managers or other third parties, and require brokers to disclose the amount of their commission.
  • Set out clear guidelines for what strata corporations are required to insure to help strata councils make informed decisions.
  • Allow stratas to use their contingency reserve fund when necessary to pay for unexpected premium increases.
  • Protect strata unit owners against large lawsuits from strata corporations if the owner was legally responsible for a loss or damage, but through no fault of their own.
  • Identify when stratas are not required to get full insurance coverage.
  • Strengthen depreciation reporting requirements.
  • Change the minimum required contributions made by strata unit owners and developers to a strata corporation’s contingency reserve fund.

Most of the changes will take effect by regulation, and BCREA looks forward to opportunities to provide input. In the meantime, resources are available from the Condominium Home Owners Association of British Columbia and the BC Government.

Government’s First Actions on Strata Insurance

After hearing from strata corporations, owners and other stakeholders – including REALTORS® – for several months, on June 23 the BC Government introduced legislative changes to help address the high costs of strata insurance.

Strong advocacy work by BCREA and the real estate boards has resulted in BCREA being named as a contributor in the government’s news release and three of our recommendations being included:

  1. Add insurance information to the Form B Information Certificate, with liability for accuracy resting with the insurer or insurance agent instead of the strata corporation. We hope this can happen quickly after the legislation is passed.
  2. Require strata corporations to inform owners about insurance coverage, provide notice of any policy changes, including increasing deductibles. This will be in effect as soon as the legislation is passed and will give all owners a better understanding of their situation.
  3. Strengthen notification requirements by insurers to strata corporations of changes to insurance coverage and costs, or an intent not to renew. The government hasn’t specified how much notice will be given, but BCREA asked that strata corporations receive 60 days’ notice.

Other measures include ending referral fees between insurers and property managers, identifying when stratas are not required to get full insurance coverage and strengthening depreciation reporting requirements. All proposed changes have to be debated in the legislature, and most of them will require more work and consultation by the government and others (ideally) to work out the details.

The government knows these changes won’t fix the problem, but this is a start. This fall, the BC Financial Services Authority, which regulates provincial financial services including insurance, will publish research findings that will help the government create effective policies to help BC strata owners and corporations now and into the future.

 

Blanket Ban on Residential Evictions Ends

Landlords with existing orders for eviction can take them to the courts beginning July 2, 2020, for enforcement and can enforce a writ order effective immediately. Landlords can enter a rental suite with 24-hour notice and don’t need the tenant’s consent. And documents can now be served in person.

REALTORS® and landlords are expected to follow health guidelines like physical distancing, cleaning and wearing masks when appropriate. Please continue with your diligence in showing property and meeting with clients. Check out the protocols from WorkSafeBC for more information.

The government commits to giving advance notice before lifting the moratorium on evictions for non-payment of rent at a future date. A framework will be put in place that will require landlords to work with tenants to repay rent that’s owing over a reasonable period of time.

For now, the freeze on rent increases remains in place, as does a landlord’s ability to restrict access to common spaces.

Read the government news release here and information about COVID-19 and tenancies here. And these are the timelines required for serving notices during tenancies.

Conveyancing in the Time of COVID-19 – So Far

Over the past week, both the Law Society of BC (which regulates lawyers) and the Land Title and Survey Authority (LTSA) have published information about land transfer processes. Bottom line: so far, an in-person meeting with a lawyer or notary is still required.

The Land Title Act requires buyers and sellers to appear before an officer to execute the documents. There are a couple of options to accommodate social distancing:

  1. The LTSA will accept an affidavit of execution (written statement sworn under oath) – speak with a lawyer to learn more about how to make that happen.
  2. The witness and the party to the transaction can sign identical copies of the same document at the same time to allow them to avoid having to handle the same physical pages when meeting.

At this time, remote or videoconference witnessing isn’t allowed. BCREA is in contact with the legal community and other stakeholders to look for options that provide more flexibility.