Insurance companies not honouring new leaky condo warranties: owners

Insurers say lack of maintenance by owners is source of some problems

CBC – Monday, June 22, 2009 | 9:38 AM PT

Thousands of B.C. condominum owners have had to live behind walls of plastic while their leaky buildings were repaired. (CBC)

Some owners of recently built leaky condominiums say B.C.’s new Home Warranty Insurance program isn’t working and that companies are unfairly rejecting their damage claims.

Dave Ricketts, a principal with RDH Building Engineering in Vancouver, said the owners of some of the leaky condo projects built since 2000 that he’s involved with are contemplating going to court after warranty companies refused their claims.

“Some of [the warranty companies] are just putting their own interpretation on the claims and deciding what they think is covered and not covered and others are just saying, ‘well, as an opening gambit, we’re going to say we’re denying everything.'”

The new home warranties are provided by four authorized private-sector insurance companies and cover labour and material defects for two years, building envelope defects for five years and structural defects for 10 years.

The program was set up by the B.C. government after the leaky condo crisis of the 1990s, along with the Homeowner Protection Office, which was established to monitor the performance of the private-sector insurance companies that issue the warranties.

Claims denied

Construction lawyer John Mendes, who represents some of the owners, says claims for both leaks and other defects are being denied for a variety of reasons, including telling the owners the problems are their fault.

“Some aggressive positions are being taken by some of the warranty providers,” said Mendes. “The response that we’re getting back on some buildings is this is all maintenance and inadequate maintenance and really an owner-caused problem rather than a construction problem.”

But Ray Windsor, the president of one of the largest warranty providers, the National Home Warranty Group, said there’s no merit to the homeowners’ complaints. He admits there is sometimes disagreement about what the warranty covers, but says the system is working.

“If it’s a legitimate claim they’re fixed and if they’re outside the terms of the warranty, they will be denied,” said Windsor. “They may not like the decision, but the decision of the adjuster is based on the defined elements of defects.”

The Homeowner Protection Office has not responded to request for an interview from CBC News, and B.C. Housing Minister Rich Coleman has so far refused to schedule an interview with CBC News.

With files from Karen Tankard

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