David Fortier

By David Fortier

November 9, 2021

Business

Condo insurance: How does Bill 141 impact you?

There were a number of changes made to the Civil Code of Québec since Bill 141 came into effect in December 2018. These changes have an impact on condo insurance and on condominium syndicate’s insurance as well. But what really changes for condo owners and syndicate administrators? Keep reading to find out!

Your condo unit must be insured.

As a co-owner, your condo insurance must include adequate coverage for your civil liability. You must take out a minimum of one million dollars in coverage if the building contains less than 13 units or at least two million dollars if it contains more than 13 units.

Your condominium syndicate and their administrators have new obligations

Drawing up a detailed description of the original units.

The syndicate must provide a description of the private portions for a standard condo unit. This process offers two major benefits:

  • It allows co-owners to adapt their condo insurance coverage to their actual needs.
  • It makes the settling of claims much simpler, both for the syndicate and the co-owners, by distinguishing what is covered under the syndicate’s insurance and under each co-owner’s insurance.

Creating a self-insured fund.

In the event of a claim, this new fund would cover the highest deductible amount included in the condominium syndicate’s insurance contract. Note that the deductibles included in the event of floods or earthquakes are excluded.

A self-insured fund is different than a contingency fund. The contingency fund is still a syndicate requirement and is used to pay solely for major repairs such as a defective elevator and for replacements of common portions such as the roof.

Having the building appraised every five years by a member of the Ordre des évaluateurs du Québec (OEAQ).

This step ensures the building is sufficiently covered in the event of a reconstruction, and that co-owners don’t end up taking a significant financial hit.

Handling repairs of any damage to the building following a loss

The syndicate is now responsible for repairing any damage to the building following a loss, to both private and common areas. However, this does not include damage to the property of a co-owner or improvements made to the units, which the co-owner must submit to his or her own home insurer.

Making sure the syndicate is adequately covered with property and civil liability insurance.

This insurance must minimally include:

  • Basic coverage required to adequately cover any eventual damage to the building, whether it occurs in the private or common areas.
  • Insurance amounts that take into account the building’s reconstruction by complying with standards, usage and regulations, including removal expenses – for example, to rebuild the entire building in the event of a major loss.
  • Insurance that covers the civil liability of all condominium syndicate administrators and directors. It covers the civil liability of the president, the secretary and any other persons responsible for ensuring that the meeting runs smoothly. Most condominium syndicate directors are not directors by trade. They are typically co-owners who agree to assume the responsibility of maintaining the building in good condition. Since a condominium is a major asset, an error committed by a director can have major financial repercussions. This insurance can lower the impact of these errors.

Which insurance covers what?*

Example of situations that may happen to youThe condo insurance covers...The syndicate insurance covers...
Following a covered loss, your oak kitchen cabinets must be replaced (the original cabinets were made of melamine).The difference in value between the cabinets described in the description of private portions and the cabinets in your unitThe value of the cabinets as described in the description of private portions
Following a covered loss, your building and the property in your unit are unusable. Your personal property
A fire completely destroys the building and the syndicate’s insurance amount is insufficient for reconstruction.Your quote is based on the amount of damage following the repair of common expenses due to the insufficient amount of syndicate’s insurance. The damage covered by the syndicate's insurance

*At all times, terms and conditions pertaining to coverage are governed solely by the insurance contract. Some conditions and exclusions apply.

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