Airbnb renters may be insureds under strata insurance policies

A subrogating strata corporation’s insurer was barred from claiming against a short-term renter

Insurance law – Property insurance – Landlord and tenant – Strata corporations – Subrogation – Right of insurer to subrogation

Strata Plan VR 2213 v. Schappert, [2023] B.C.J. No. 2272, 2023 BCSC 2080, British Columbia Supreme Court, November 27, 2023, S.R. Coval J.

An Airbnb renter caused a fire in a strata building, resulting in damage to the common property. The strata’s insurer claimed against the renter to recover the cost of insured repairs. A special case was submitted to determine whether the subrogated claim was barred by either the common law rule prohibiting subrogation against an insured, or the covenant to insure and waiver of liability contained in the strata bylaws.

The court determined that the claim was barred by the common law rule against subrogation, which turned on whether the renter was an insured. Section 155 of the Strata Property Act mandates that “persons who normally occupy the strata lots” are named insureds in a strata corporation’s insurance policy. By virtue of his physical possession of the unit, and the strata’s authorization of short-term rentals, the renter was a person who normally occupied the strata lot.

Although the claim was barred by the common law rule against subrogation, the court considered whether the waiver of liability in the strata bylaws would prevent the claim. The waiver provided that an owner shall indemnify the strata corporation from the expense of any repair, but only to the extent that such expense was not reimbursed from insurance. The waiver did not apply to the renter because he was not an owner, and there was no implied intention to extend the waiver.

This case was digested by Joe Antifaev, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Joe Antifaev at [email protected].

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