Vancouver Leaky Condos – Supreme Court of Canada Reaches Landmark Decision

Vancouver Leaky Condos Supreme Court of Canada Reaches Landmark Decision

The Supreme Court of Canadaoverturns previous decisionby the BC Court of Appeal holding general contractor's insurance policy's responsible for subcontractor work.

The leaky condo saga in Vancouver is alive and well; thisalmost 11 years after the construction industry supposedly figured out that California construction and weatherproofing (or lack thereof) wasn't a great fit up here in the Northwest. I'll never forget interviewing for a job with a local developer back in 2001. The position was for Development Manager' so I thought it would be a good move to ask about the leaky condo situation and why it had become so prolific in Vancouver. Bad move.

The Supreme Court of Canada recently set down a precedent-setting decision involving ownersof leaky condos and their recourse against contractors and subcontractors from an insurance claimpoint of view. The Court case itself emanated from a BC Housing Co-op project undertaken by Progressive Construction. The project leaked and BC Housing sued.

The Supreme court ruled unanimously that an insurance company has a duty to defend legal actions for claims of water damage to suites in the affected development. The big concern, as voiced by Greater Vancouver Home Builders Association (GVHBA) President, Peter Simpson, is that peoplewho own leaky condos will be able to sue under the general insurance policy to recoup some of the damages caused by shoddy workmanship by subcontractors.

The concern amongst GVHBA members (mostly contractors) is that insurance premiums might start to climb as insurance companies look to offset this added risk.

Click here to read this full leaky condo article in The Vancouver Sun

This Supreme Court ruling reverses a previous ruling by the BC Court of Appeal stating that poor workmanship by subcontractors should be covered by the subcontractors own insurance policy.

So far, insurance premiums have not increased, although the industry seems on high alert as the Supreme Court decision is only a month old.

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