Secondary suites continue to be an affordable housing option for Metro Vancouver area residents, benefitting home owners as mortgage helpers and tenants as a less expensive roof over their heads.

Secondary suites are so prevalent that Canada Mortgage and Housing Corporation estimates there are now about 101,808 accessory suites in the Metro Vancouver region.
“With so many suites in our area, it’s important to remind home owners to let their insurer know about a suite and to buy insurance to cover the suite,” says REBGV member David Chambers, a licensed REALTOR and a licensed insurance agent, and vice president of Chambers Olson Insurance in Vancouver.
“Whether the suite is legal or illegal, having insurance coverage is vita,” says Chambers who notes there is a misconception among home owners that their existing policy will cover a suite. “It doesn’t,” says Chambers.
A home owner who doesn’t tell their insurer about a suite and that there are two households living in the home, opens themselves up to a significant risk.
An unreported and uninsured suite could potentially void the existing insurance contract on the primary residence if there is a flood or a fire,” explains Chambers.
Some home owners may not properly insure their property because of fear that their insurer will report the suite to local municipality. “This isn’t true,” says Chambers. “However, we always advise our clients to comply with local bylaws and report and register the suit with the local municipality.”
How much will insurance cost? “About 10% of the cost of your total home insurance. So if you’re paying $1,200, it will cost you and additional $120,” says Chambers.
Home owners who rent their secondary suite can also buy separate comprehensive rental insurance. Depending on the insurer and on the policy this can cover vandalism and damage by tenants, typically up to a payout maximum limit of 5,000. This insurance doesn’t cover the tenant’s belongings. The tenant has to buy their own insurance for their possessions.
Home owners with laneway homes, coach homes above garages and other authorized or unauthorized accommodation on their property should also let their insurer know and should buy appropriate coverage. 

Article from Realtor Link, August 10th, 2012

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B.C. condo unit owners have yet to take a run at challenging the fairness of deductible downloading bylaws of strata corporations, although case law seems aligned for such an opportunity.

Krista Prockiw of Alexander Holburn Beaudin & Lang LLP mentioned this state of affairs while discussing insurance law issues arising out of British Columbia’s Strata Property Act. She was speaking on May 10 at the Insurance Brokers Association of B.C.’s annual convention in Kelowna, B.C.

First, Prockiw observed the provincial act does not limit the ability of a strata corporation to sue a condo owner to recover a deductible. Such an action can proceed if the strata corporation has a valid bylaw or rule in place allowing the damage to be charged to a unit owner.

Second, a strata corporation can sue a unit owner for the insurance deductible if “the owner is responsible for the loss or damage.”

Prockiw suggested this scenario is akin to strict liability, meaning a condo unit owner can be found “responsible” for damage without requiring a finding of negligence on the part of the owner.

Consider, for example, OSP KAS 1019 v. Keiran, Simkus and Wawanesa Insurance. The owner of a condo unit had a pipe burst in the bathroom wall because high acid levels in the water caused a coupling to break down. The court determined the owner had a duty to repair and maintain the unit, which was not common property, and, therefore, was “responsible for the loss, regardless of the absence of fault or negligence on their part.”

Finally, as Prockiw and brokers attending the seminar noted, policy deductibles for some strata corporations are substantial, running anywhere from $25,000 to $500,000.

“If you live in a strata corporation, you share everything in proportionate shares,” Prockiw said. “You share maintenance fees, you share liability, so this whole idea that one owner is responsible for the entire deductible could be seen as contrary to [the common expense philosophy],” she added.

“No one’s ever taken a run at it, but we are certainly waiting for the case in which you do have an exceedingly high deductible, a strict liability bylaw and no negligence on the part of an owner. The owner might then take a run at [the deductible download] being significantly unfair.”

Four years ago, a case commenced relating to the Strata Property Act’s provisions on “significantly unfair” deductible downloads, Prockiw reported. But the case settled before trial, meaning B.C. courts still have not been called upon to interpret the standard of fairness.

“The courts have held that ‘significantly unfair’ is a really high threshold to meet,” Prockiw said. “It might not be possible to meet that.”

May 11, 2012 canadianunderwriter.ca article, read online at http://www.canadianunderwriter.ca/news/opportunity-exists-for-b-c-condo-unit-owners-to-challenge-fairness-of-deductible-downloading-bylaws/1001253862/

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Occasionally, claims are reported to the Real Estate Errors and Omissions Insurance Corporation (REEOIC) involving complaints by buyers against licensees which might not have been made if those buyers had bought title insurance.
 
Title insurance is an insurance policy provided by title insurance companies that protects residential or commercial property owners and/or their lenders against losses related to a property's title or ownership.
 
While each title insurer may offer slightly different coverage, some of the coverage provided by title insurance companies includes: coverage for unknown title defects; survey errors and errors in public records; losses related to improvements made without the requisite building permits (unless made by you); existing liens against the property's title for unpaid debts by the previous owner (utilities, taxes, mortgages or condominium charges registered against the property); real estate fraud and forgery; invalidity of mortgages; and encroachment and unregistered easement issues.
 
Title insurance will generally not cover known title defects, environmental hazards, native land claims, matters created, allowed or agreed to by the insured, or matters known to the insured but not disclosed to the title insurer prior to closing (e.g. matters identified in a building inspection).
Title insurance is usually purchased by a buyer at the time of purchase, although it may be purchased anytime after. The insurance cost, generally a one time fee or premium, is usually determined by the property's value and depends upon the chosen provider.
 
The advantage to licensees of buyers purchasing title insurance is that it shifts liability from the licensee to the title insurer. Consider this scenario: an elderly seller owns a piece of property in a rural area for many years. After obtaining a variance from the governing authority, the seller constructs outbuildings which encroach upon the adjacent property. No record is kept of the variance by the approving authority.
 
Years later, when selling the property, the seller completes the Property Disclosure Statement indicating that he is unaware of any unregistered encroachments. The buyer discovers the encroachment after purchasing the property and incurs a loss in rectifying the issue. A buyer with title insurance would likely be indemnified by the title insurer for any proven loss associated with the violation. A buyer without title insurance would likely sue the seller and licensees involved in the sale to recover losses associated with the undisclosed encroachment.
 
Here are examples of recent claims paid out to BC homeowners by a major title insurer: 
Buyer received notice from the City that the basement apartment was built without obtaining required development or building permits. A permit was required to remove or to legalize the apartment. Cost of claim: $239,958.
 
 
Buyer had municipality conduct a site inspection of the property after experiencing plumbing problems. The inspector found numerous problems with the dwelling, as well as illegal gas and plumbing lines, and an unpermitted addition to the garage. The municipality issued an Order to Comply. Cost of claim: $270,797.
 
source: Real Estate Errors and Omissions Insurance Corporation
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