The insurance of the syndicate covers the common portions of the immovable, as well as your private portion. In the event of a loss, it will not cover you for the improvements made to your private portion. It is your responsibility, therefore, to ensure that these improvements are adequately, by the means of an individual insurance. This is generally the case, if renovations have been carried out with material of a higher quality than the original one. Your insurance policy must cover the value of the improvements you have made yourself, as well as those made by previous co-owners.
What is an improvement?
"Improvement" means work that results in an additional value to your unit compared to the original condition of your unit. Repainting your apartment is not by itself an improvement. On the other hand, replacing the original floor covering (flooring) with one of higher quality to the original is, in all likelihood, an improvement to your private portion.
How to identify the improvements?
Such improvements are generally those that have been made since the creation of the co-ownership (at the publication of the declaration of co-ownership), and not only since you acquired the apartment. If you are not the first owner, you have to check whether improvements have been made over time. To do it right, it is recommended that you consult the register of co-ownership from its inception. In doing so, you may find the information you are looking for, such as the prospectuses or brochures issued by the developer at the time, or even the memorandum that may list the nature of the original material used.
Unit of reference
In addition, article 1070 of the Civil Code of Québec was amended in June 2018. It now has a third paragraph which provides that “the syndicate keeps at the disposal of the co-owners a description of the private portions that is sufficiently precise to allow any improvements made by co-owners to be identified. The same description may be valid for two or more portions having the same characteristics”. This description, which will serve as the reference unit, must be filed in the register of the co-ownership, so that the co-owners who request it may consult it. The syndicates’ obligation to establish such a description of the private portions became effective December 13, 2018, for co-ownerships established on or after June 13, 2018. Those constituted before that date are not yet subject thereto but they will be on June 13, 2020.
How to fix the value of the improvements?
If the improvement work in your private portion has been carried out by contractors, the sum of their invoices should allow you quickly to establish the value of the work. You will then have to determine the added value given to your apartment therefrom. On the other hand, if you purchased a unit already improved by the previous owners, going back in time to list all improvements and calculating their costs can be more difficult. Unless your vendor provides you with the necessary documentation, you will have no choice but to use the services of a chartered appraiser. This professional will establish a reliable valuation opposable upon the insurer in case of loss.
Obligation to take out insurance?
Insurance coverage for the improvements to a private portion is not required under the Law. However, most declarations of co-ownership require co-owners to subscribe and maintain such insurance coverage. Moreover, the latter must prove that the insurance is in force - each time they renew their insurance policy or change their insurer - by the means of an insurance certificate sent to the board of directors.
WHAT YOU SHOULD KNOW! Some developers put up for sale unfinished apartments, leaving it to co-owners to make their own improvements to the private portions. This is often the case in historic buildings transformed into lofts. Yet, the cost of such improvement work can be substantial. It is your responsibility to take out insurance that reflects the actual value of the improvements.
WHAT TO KEEP IN MIND: To determine what constitutes an improvement to your private portion, you should refer to the syndicate's technical description, which describes the original layout of the private portion (reference unit). If it has not yet been done, and you are not a first-generation buyers, your seller should provide you with a list of the improvements that he and his predecessors have made, under reserve he has knowledge thereof.
WARNING! Any syndicate of co-owners created before October 31, 2017 must, in the near future, make available to the co-owners a description of the private portions that is sufficiently detailed that the improvements made by the co-owners be identifiable (reference unit). When this obligation will comes into effect (no later than June 13, 2020), the syndicate's inaction will result in the private portions being reputed not comprising any co-owner’s improvement.
CONSULT THE PUBLICATION: Condo Insurance: Everything you should know at pages 90 and following.