Payment of a syndicate’s deductible or amount of damage: what has changed
In the event of a loss, a syndicate is responsible for repairing the damage. If the syndicate files a claim with its insurer, it must pay the deductible under its policy. In addition, the risk that caused the damage may not be covered by the syndicate’s policy (absence of insurance) or the coverage limit may not be sufficient (insufficient insurance). The syndicate’s entitlement to make claims to recover a deficit (deductible, absence of or insufficient insurance) in the event of a loss has changed.
Before legislative changes in 2018
Before the legislative changes of 2018, a syndicate could claim the deficit from the co-owner in question, whether they were responsible or not, as the damage had originated in their unit. The co-owner could then use their insurance policy’s coverage to pay amounts claimed by their syndicate.
However, the payment granted under the coverage could only be applied to damage to the co-owner’s unit, not to damage to other units or common areas.
Legislative changes of 2018
Since the legislative changes came into force in 2018, a syndicate can no longer make a claim against a co-owner simply because damage originated in their unit, even if a declaration of co-ownership provides for such claims. In fact, any provision of a declaration of co-ownership that allows a syndicate to make such claims is no longer valid (paragraph 2 of article 1074.2 of the Civil Code of Québec).
Claim of a syndicate against a co-owner
In the event of a loss, a syndicate can make a claim against a co-owner if it deems that the latter is responsible for damage to their unit or to other parts of the building, under certain conditions.
Whether the syndicate files a claim with its insurer or not, it is only entitled to claim the payment of its deductible or the amount of the damage not covered by its insurance (absence of or insufficient insurance).
As such a situation engages the co-owner’s civil liability, the syndicate could have to send the co-owner a formal notice indicating the amount claimed and the reasons for its claim. The syndicate must do this to comply with articles 1074.2 and 1457 of the Civil Code of Québec, among others.
Civil liability insurance: better protection for co-owners
Because a syndicate can sue a co-owner for damage that occurred in their unit or elsewhere in the building, insurers have added civil liability insurance coverage to co-ownership policies. It replaces the coverage that existed before 2018.
If the co-owner is responsible, their insurer will reimburse the syndicate. If the co-owner is not responsible, the syndicate can either split the deficit among all the co-owners or use its self-insurance fund.
Since the legislative changes of 2018, a syndicate has the obligation to repair the damage in the event of a loss. It may take legal action against a co-owner that it deems liable for the amounts that its insurer has not or would not have paid (deductible, absence of or insufficient insurance).