We have all heard about the important reform on the subject and the advent of Bill 141 adopted by the Quebec National Assembly on June 13, 2018, but what exactly is the situation?
First of all, article 1073 C.C.Q. obliges a syndicate to take out insurance covering the entire building in order to ensure its conservation.
Being a provision of public order, it is not possible to exempt oneself from this obligation which is applicable to all syndicates of co-ownership.
The only limit to this obligation is the coverage of improvements made to the private portions by the owner. The latter has the obligation to support the improvements and modifications to the initial standards of the building.
To this effect, through article 1070 of the Civil Code, the syndicate is now required to keep a register containing a description of the private portions that is sufficiently precise for the improvements made by the co-owners to be identifiable.
Subsequently, Bill 41 clarified the accountability of the co-owners to the community, in particular with respect to the accountability of the co-owners to the community.
This clarification led to the adoption of article 1074.2 of the Civil Code:
“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 co-owners 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 and, in the cases provided for in this Code, for the injury caused by the act, omission or fault of another person or by the act of things in the co-owner’s custody.”
Indeed, this provision is important since article 1075.1 C.C.Q. does not, in principle, allow subrogation of rights in favour of an insurer against the syndicate, or against a co-owner.
However, article 1074.2 of the Civil Code has the effect of making co-owners responsible and aware of their responsibilities with respect to the common property.
For example, the co-owner may be claimed for damages suffered in the event of a fault on his part, or for damages to property in his custody.
The purpose of the new law is therefore to restore the balance, given that a large number of claims arise from negligence or carelessness.
We need only think of taps that are improperly turned off, improperly installed appliances or a leaking water heater.
In such cases, the co-owner could be declared responsible and have to compensate the syndicate or the insurer.
Consequently, the Law provides, since October 15, 2020, that:
“1064.1 Each co-owner shall take out third person liability insurance the minimum compulsory amount of which is determined by government regulation.”
Therefore, in principle, the syndicate, and each of the co-owners, must have a liability insurance policy.
To this effect, it is clear that in the case of multiple insurance policies, the one subscribed by the syndicate will be called “first line” and will intervene before that of a co-owner.
Obviously, in the event of a disaster, the syndicate could choose not to avail itself of its insurance coverage but will have to diligently see to the repair of damages in accordance with article 1074.1 of the Civil Code. In such a case, the syndicate waives the right to claim any damages from a co-owner, or from anyone who is part of a co-owner’s house.
It goes without saying that the new provisions will create upward pressure on insurance premiums and, at the same time, on deductibles.
It is for this reason that, as of April 15, 2022, the syndicate will be subject to article 1071.1 C.C.Q. which states that:
“1071.1 The syndicate establishes a self-insurance fund which is liquid and available on short notice. The syndicate is the owner of the fund.
The self-insurance fund is to be used to pay the deductibles provided for by the insurance taken out by the syndicate.
It is also to be used to make reparation for injury caused to property in which the syndicate has an insurable interest, where the contingency fund or an insurance indemnity cannot provide for such reparation.
The self-insurance fund is established on the basis of those deductibles and a reasonable additional amount to provide for the other payments for which the fund is to be used.”
For more information, do not hesitate to consult us.