Judge rules $18,000 payment for water leaks in British Columbia is ‘clearly unreasonable’

A British Columbia Supreme Court judge has ruled that an arbitrator’s decision to penalize two tenants for more than $18,000 in repair costs after a water leak at their landlord’s home was “clearly unreasonable.”

In a ruling last week, Judge William Veenstra overturned the order and remanded the case to the province’s Residential Tenancy Branch for renewed arbitration, meaning the relief for tenants Claudia Drummond and Gregory Dahl may only be temporary.

“While I am convinced that the arbitrator’s analysis in this case was clearly unreasonable, I am not convinced that the inevitable result is a dismissal of the claim,” Veenstra wrote.

Damage not covered by insurance

The dispute dates back to March 2022, when Drummond noticed a bulge in the basement ceiling of the house they were renting in Surrey.

The court heard Drummond “immediately” notified landlord Randeep Sangha of the damage via text message, but it was too late to prevent $18,757 in repair costs – including the cost of replacing cabinets, drywall and skirting boards in the property.

The landlord said her insurance company refused to cover the cost, saying the damage did not happen suddenly or accidentally, but over time.

Sangha filed a claim with the RTB for reimbursement of the repair costs. Although the arbitrator who originally heard the case could not determine the exact cause of the damage, she found that Drummond and Dahl had been “negligent” in not noticing it sooner.

Drummond admitted she had not visited the basement in the four months leading up to March 2022. A home inspection conducted the previous November found no signs of problems.

“I cannot determine how the damage occurred. However, a reasonable person would conclude that there was significant spillover at multiple points in time, based on the various areas of damage,” the arbitrator wrote in part of her decision cited by Veenstra.

“Although the tenants may have drained the water directly to the top floor, the damage to the lower portion was not noticed.”

In addition to awarding Sangha damages, the arbitrator also allowed her to keep a $1,200 bond from Drummond and Dahl, who moved out of her home in April 2022.

Arbitrator confuses tenants

In assessing the case, Veenstra raised a number of objections to the RTB’s decision, including the fact that the arbitrator had apparently not distinguished between two separate units in Sangha’s house.

The court heard that Drummond and Dahl moved into the main home upstairs in November 2018 and that Drummond began renting the basement as a workspace in March 2019.

The judge noted that Dahl was not a party to the basement lease. Only Drummond and her ex-husband, who apparently helped with the rent, were named in the document.

But in the arbitrator’s decision, she found that Drummond and Dahl both had “control and possession” of the basement unit — the only place where the damage was visible — and described each of them as “negligent” for not noticing the problem sooner.

“Nothing explains the nature of any obligation on the petitioners to periodically visit the basement,” Veenstra wrote. “Nothing explains how such an obligation could operate if Mr. Dahl was not a tenant of and had no legal right to enter the basement.”

The judge noted that Sangha had repaid the basement unit deposit to Drummond and her ex-husband in May 2022.

Pending the outcome of the lawsuit after it was refiled with the RTB, Veenstra also quashed the order that allowed Sangha to keep the $1,200 security deposit for the upstairs rental.