Skip to main content

Possible changes to co-ownership on the horizon (cont'd) - insurance

Possible changes to co-ownership on the horizon (cont'd) - insurance

Following public consultations held in March, April and May 2012, at which we filed a written submission and have made representations, the Advisory Committee on co-ownership submitted its report on 7 November to the Minister of Justice, Mr. Bertrand St-Arnaud, and to the Board of Directors of the Chamber of Notaries of Quebec.
In addition to presenting an overview of the information gathered during these public consultations this report contains recommendations for legislative changes to divided co-ownership in Quebec which will be considered by the Minister of Justice and will possibly give rise to legislative changes affecting co-ownership.
In this article we will discuss recommendations for condominium insurance.
According to the report of the Advisory Committee on co-ownership, the latter has found, during the public hearings, a need for information and training to be disseminated to insurance brokers, directors and managers of syndicates in connection with condominium insurance and especially on the importance of a proper evaluation of the building to its new value and cover it with appropriate insurance as required by Section 1073 C.c.Q.
Also in this regard, the Committee noted that it is frequently common practice that the insurance underwritten by the syndicate is of an insurable value which is lower than the actual value of the property. The Committee stressed that this is partly due to the fact that the syndicates do not use a licensed appraiser to determine the amount of insurance. A periodic assessment should be imposed so that there is a real balance between the value of the property and the value specified in the insurance contract.
The Committee is of the opinion, that in case of a major disaster affecting the building, there should not be a part of it which remains the responsibility of the owners due to an insufficient amount of coverage, because this could lead to the inability to reconstruct the building, because of lack of funds available, or because of significant practical difficulties for the owners who will be obliged to obtain personal financing to fill the gap.
In this regard, the Committee made the recommendation that this periodic evaluation should be done, at the most, every five years, or more frequently if the syndicate wishes so, all of it without distinguishing the size of the building, or the type of co-ownership. It was also noted that construction costs are constantly increasing and that it is therefore appropriate to make this assessment on a regular basis.
We want to emphasize that all the recommendations of this committee will have to be studied in detail by the Minister of Justice of Quebec, and if selected, they will have to follow the usual path of any change in law before receiving final approval of the National Assembly for them to take effect.
We will come back to you in a future article about other recommendations that we consider important for co-ownership.
In the meantime, we invite you to contact our team of lawyers specialized in real-estate law for any question about this subject.

About the author

Me Kevin Lebeau

Join now

Not already member of the APQ ?

Take advantage of all our services by joining now

This site uses cookies in order to provide you with the best possible user experience. By continuing to browse this site, you agree to the use of cookies.