Insurance Deductible Bylaws – Clearing up some misinformation
The Protecting Condominium Owners Act, 2015 (PCOA) introduces some important changes to condominium insurance coverage for owners.
Condominium corporations provide property insurance on common elements as required under the condominium act. They also provide coverage on the individual units up to the level of a standard unit by-law.
The Act prior to the PCOA amendments provides that unit owners are responsible for the Corporations deductible if they have damaged their own unit. It also says that a condo may pass a by-law, and many have, that owners will be responsible for the deductible if they damage the common elements or another owner’s unit.
The revised Condominium Act, 1998, as amended by PCOA, fixes this gap and makes owners responsible for the deductible if they or residents of their unit cause damage to the common elements or to another unit – regardless of whether the condo has passed a by-law or not. This is an important change and a positive one that puts responsibility for damage where it should rest, on owners to maintain their own units and appliances and be careful to prevent damage to other units.
The PCOA amendments shift the burden of proof so that the Corporation must prove that the damage was caused by an act or omission of the unit owner or occupants of their unit in order to be responsible to pay the insurance deductible.
Although there are rumblings that by-laws passed before the revisions to the Condominium Act take effect will be “grand-fathered”, the Government has not confirmed their intentions and we are still left wondering if condos should be scrambling to enshrine “strict liability” in their by-laws before the revision become law.
Here is what we do know – if you do not have a strict liability provision in your current by-laws your condominium corporation will definitely bear the burden of proof in any future claim that may have been the caused by an act or omission of the unit owner or occupant. If you do have a strict liability clause in your current by-laws, or if you scramble like mad right now to draft one and get it passed in the coming 2-5 months then you may be grandfathered…we simply don’t know.