Strata Plan BCS3000, located in Burnaby, suffered significant water damage due to a burst pipe within a common area. The total repair cost was $85,000, and the strata corporation's insurance policy has a $25,000 deductible. Investigations confirmed that the burst pipe was due to normal wear and tear, not an owner's negligence. Which of the following is the correct allocation of the insurance deductible?

Question: Strata Plan BCS3000, located in Burnaby, suffered significant water damage due to a burst pipe within a common area. The total repair cost was $85,000, and the strata corporation's insurance policy has a $25,000 deductible. Investigations confirmed that the burst pipe was due to normal wear and tear, not an owner's negligence. Which of the following is the correct allocation of the insurance deductible?

Answer options: ✅ The strata corporation is responsible for the full $25,000 deductible, payable from either the operating fund or contingency reserve fund.

• The owners of the units directly affected by the water damage are collectively responsible for the $25,000 deductible, divided by their unit entitlement.
• The strata corporation must levy a special assessment against all owners to cover the $25,000 deductible.
• The strata corporation is responsible for 75% of the deductible, and the owners of the affected units are responsible for 25%.

Correct answer: The strata corporation is responsible for the full $25,000 deductible, payable from either the operating fund or contingency reserve fund.

Explanation: Section 158 of the Strata Property Act states that the strata corporation must pay the deductible for a claim unless an owner is responsible for the loss or damage. Since the damage was due to normal wear and tear in a common area, the strata corporation is responsible.