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Condo building insurance: Main changes to the Civil Code of Québec (Bill 141)

In December 2018, several changes to the Civil Code of Québec affecting divided co-ownerships came into force. Keep reading to find out more about the main changes and how they impact condo associations.

1. Condo associations now responsible for repairing damage

When a loss occurs, condo associations are now responsible for repairing all damage to the insured property, including damage to the individually owned portions of the building (each condo owner’s unit). Any damage to improvements condo owners have made or to their personal belongings is not covered.

When a condo association submits a claim to its insurance company, some expenses may still not be eligible for reimbursement, such as:

  • All applicable deductibles
  • The portion of damage that exceeds the insurance policy limit (e.g., a sewer back-up causes $125,000 in damage, but the insurance policy has a $100,000 limit)
  • The total cost of all damage, if the risk that has caused the loss isn’t covered under the insurance policy

Here’s how condo associations can recover these amounts:

If the loss was not caused by a condo owner

Sometimes none of the condo owners are at fault. Loss assessment is when the condo association shares responsibility for the damage with all condo owners.

For example:

If a building’s main electrical panel breaks, the condo association’s insurance company takes care of the repairs, but the condo association must pay a $10,000 deductible. The condo association can then split this cost among all condo owners, regardless of whether specific units or common areas were affected by the damage.

If the loss was caused by a condo owner

If a condo owner is found at fault, the condo association may ask them to pay the entire amount not covered under the association’s insurance policy.

For example:

You don’t put a cigarette out properly and this starts a fire in your unit that spreads to other parts of the building. The condo association’s insurance company takes care of the repairs, but the condo association must pay a $10,000 deductible. Since the fire was your fault, the condo association may ask you to reimburse the $10,000 deductible it had to pay.

2. Description of the individually owned portions of a building

From now on, condo associations must provide all condo owners with a description of the individually owned portions of the building which describes the original unit and is detailed enough to identify improvements the condo owners have made to their respective units.

If the condo association fails to prepare a detailed description of the individually owned portions and any improvements made, any damage to the building may need to be claimed under the building’s insurance policy, including costs to repair any improvements that condo owners have made to their units.

Deadline for providing the description

Condominiums built before June 13, 2018

The description must be provided to condo owners by June 13, 2020.

Condominiums built on or after June 13, 2018

The requirement to provide a description has been mandatory since December 13, 2018.

3. Future provisions

Between now and June 13, 2022, the government will introduce a regulation that defines the duties and obligations of condo associations regarding:

Directors and officers liability coverage

This optional coverage is for directors and officers, as well as the president, secretary and other individuals responsible for overseeing how the condo building is run.

Mandatory appraisal of the building by a professional

Buildings must be appraised at least once every 5 years by a member of a government-approved professional corporation.

Creation of a self-insurance fund

The condo association must create a liquid self-insurance fund to cover deductibles and repair costs that exceed contingency funds or insurance limits.

New list of usual risks

The Quebec government will issue a regulation identifying which usual risks could be covered under a condo association’s insurance policy.

Building insurance amount to be specified in the policy

The Quebec government will indicate what needs to be included when calculating the costs of reconstruction (applicable taxes, tear-out expenses, and fees for various professionals involved in the reconstruction).

Impact on homeowners (condo insurance)

The changes also affect homeowners who have taken out condo insurance policies for personal belongings and liability.

Learn more

What you see on this page is based on information that was made public on March 25, 2019.

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