If a landlord collects contributions to fire insurance from tenants as part of the lease agreement, the expectation is that fire insurance will be purchased.

In reasons released last week, Giddings Holdings Ltd. v. High, 2014 BCSC 1658, an unfortunate landlord failed to insure his building despite the lease including a proportionate contribution by the tenants to “building insurance.”  A fire then destroyed the building allegedly as a result of the negligence of the tenants.

The landlord brought a claim against the tenants but Justice Crawford dismissed it on the defendants’ application, relying on Chief Justice Laskin’s comments in Ross Southward Tire Ltd. v. Pyrotech Products Ltd., [1976] 2 S.C.R.350:

counsel for the appellant contended…that under the provision of the lease respecting payment of insurance rates by the tenant, the risk of loss by fire passed to the landlord at least upon the presentation by the landlord of the insurance bill, and that the matter thereafter was between the landlord and its insurer. I agree with this contention.