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Bill 141: Impact on co-ownership management

 

How do the new laws on co-ownership insurance affect you?

Bill 141 has created a lot of talk! Here are some answers to your questions…

Syndicates of co-ownership have recently had to adapt to new regulations that are not in their favour regarding co-ownership insurance. In fact, henceforth, they must build a self-assurance fund to cover insurance deductibles. This fund must be liquid and available in the short-term.

In addition, henceforth, if a co-owner is at fault for a loss or an insurance claim, the syndicate of coownership
can no longer collect a portion or all of the deductible or repair cost from the guilty party (a
co-owner or someone in their household).

The problem with this situation is that some insurance companies refuse to cover syndicates of coownership
when the co-owner is at fault or affected if the claim could be covered by the self-insurance
fund given its low amount. Some insurance companies justify this by the fact that it is the syndicate of co-ownership’s responsibility
to also take charge of the repairs in private portions.

There are other consequences as well. In fact, insurance premiums have reportedly increased significantly since this legislation change according to some stakeholders in the co-ownership industry.

These people are very disheartened because they were not consulted before the legislation was implemented.

Some legal experts have examined the new laws and say that they appear to be ambiguous and contradictory.  Should the government change them? Will actions in favour of syndicates of co-ownership be taken?

Here are the new regulations in question:

« 1074.1 When a loss occurs which falls under the coverage provided for by a property insurance contract
entered into by the syndicate and the syndicate decides not to avail itself of the insurance, it shall with dispatch see that the damage caused to the insured property is repaired.

A syndicate that does not avail itself of insurance may not sue the following persons for the damages for which it would otherwise have been indemnified by the insurance:

  1. a co-owner ;
  2. a person who is a member of a co-owner’s household; or;
  3. a person in respect of whom the syndicate is required to enter into an insurance contract to cover the person’s liability »

 « 1074.2 The sums incurred by the syndicate to pay the deductibles and make reparation for the injury
caused to property in which the syndicate has an insurable interest may not be recovered from the coowners
otherwise than by their contribution for common expenses, subject to damages it can obtain from
the co-owner bound to make reparation for the injury caused by the co-owner’s fault. Any stipulation which is inconsistent with the provisions of the first paragraph is deemed unwritten. »

« 1074.3 Where insurance against the same risks and covering the same property has been taken out
separately by the syndicate and a co-owner, the insurance taken out by the syndicate constitutes primary
insurance. »

 « 1075.1 An insurer may not, despite article 2472, be subrogated to the rights of any of the following persons against another such person:

  1. the syndicate;
  2. a co-owner;
  3. a person who is a member of a co-owner’s household; or;
  4. a person in respect of whom the syndicate is required to enter into an insurance contract to cover the person’s liability.

An exception to this rule applies in the case of bodily or moral injury or if the injury is due to an
intentional or gross fault. »

 

Sources :

http://www.djclegal.com/l-assurance-des-coproprietes-divises-nouvelles-regles-applicables-depuis-le-13-12-2018-3290 [in French]

http://www.bflrealestate.ca/nouvelles-et-articles/51-assurance-de-la-copropriete-projet-de-loi-141-adopte.html [in French]

https://en.rgcq.org/assurance-article-10742/?utm_source=RGCQ+Montr%C3%A9al&utm_campaign=a1920e5d56-EMAIL_CAMPAIGN_2018_05_30_03_05_COPY_01&utm_medium=email&utm_term=0_8a7dd1a0a0-a1920e5d56-284666273&mc_cid=a1920e5d56&mc_eid=b870610779

 

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