July 23, 2019 - Pierre G. Champagne, lawyer and partner at the de Grandpré Joli-Coeur law firm, was interviewed by Marika Wheeler from CBC Radio on the proposed draft Regulation published on July 17, 2019. This Regulation would require syndicates to create an self-insurance fund for their co-ownership, in addition to the contingency fund. The self-insurance fund will be created to cover the highest deductible of the insurance policy of the syndicate.
For some co-ownerships, the deductible is extremely high. ''Some co-ownerships have deductibles for water damage of over $100,000. It becomes a real problem when a loss occurs and the syndicate does not have enough money to fund the repairs. This proposed Regulation, which comes from Bill 141, closes that gap and provides that the co-owners will have to fund this self-insurance fund over a number of years.'', explains Pierre G. Champagne.
The new Regulation will provide that syndicates assess the co-owners to ensure that at least half the highest deductible amount is kept in the fund the first year, and that the other half will be added the next year to complete the fund.
The co-owners will have to replenish the self-insurance fund as losses and payments occur over the years. Unfortunately, the burden has been put on the co-owners for the deductible. As for the Insurers, the government has not yet published a Regulation establishing the legal parameters to determine what is or is not an “unreasonable deductible amount” in divided-co-ownership insurance policies. At present, insurers are left to themselves and the market to fix the deductibles, which creates various problems for co-owners.
It is believed that the coming into force of these new provisions will not happen before 24 months after the publication of the proposed Regulation, and at the latest by June 13, 2022.
To listen to the interview, click on this hyperlink.