Sporadic Visits to a Vacant Home: Too Little, Too Late

Most homeowner policies contain an exclusion under which the insurer may deny coverage if at the time of the loss the home had been "vacant" (usually for a period of more than 30 consecutive days). In a recent case before the BC Court of Appeal, Wright v. Canadian Northern Shield Insurance Company, the insured tried to argue that sporadic visits to the rental home made by the former tenant after the official end of the tenancy did not trigger the vacancy exclusion.

The insured owned a rental house that was destroyed by fire in September of 1999. The insured had rented the house to a couple over a year before the fire occurred. Most of the communications between the insured and the tenants took place over the telephone. In late June 1999, three months before the fire, the tenants called the wife of the insured and told her that they would shortly be moving out of the house. According to the tenants, they were not told by the insured that they had to provide written notice of their intention to vacate nor were they told to call the insured once the move out had been completed. On the evidence, the trial judge accepted the insured had full knowledge that the house would be vacant by early July 1999.

During their tenancy, the tenants had maintained a small vegetable garden in a solarium of the house and the tenants continued to visit the house after they vacated to look in on the garden and pick whatever vegetables were available.

The trial judge found that the premises were vacant to the knowledge of the insured and came to this conclusion based on the following criteria: the intention of the owner and the last tenant; the presence or absence of possessions in the premises; the circumstances under which any possessions found in the premises may have been left or deposited there; the condition of the premises, including whether the premises had utilities hooked up; the length of time the premises may have been unoccupied; and the use typically made of the premises.

On appeal, the insured argued that the house was not "vacant" within the meaning of the policy because of the tenants fairly regular visits to the solarium vegetable garden.

Relying on the leading British Columbia decisions of Hirst v. Commercial Union Assurance Co. of Canada and Morton v. Canadian Northern Shield Co., the Court applied a common sense approach with a view to all of the circumstances and concluded that the occasional visits by the tenants to the house did not change the status of the house from being vacant to occupied. The tenants had not manifested any intent to exercise dominion over the house, nor did they continue to consider themselves to be tenants of the insured. Thus, the Court of Appeal ruled the insurer was entitled to deny coverage on the basis of the vacancy exclusion.

While the case is not particularly unusual or groundbreaking, it contains a useful summary of the law in BC re the vacancy exclusion and can be accessed on the BC Courts website at:
http://www.courts.gov.bc.ca/jdb-txt/ca/
05/05/2005bcca0599.htm

Readers with questions about the case or the exclusion generally are welcome to contact Valerie Dixon (telephone: 604-891-7743 or e-mail: vsd@cwilson.com).