Insurance the like of which you've never seen

October 31, 2017 - After conducting a co-ownership insurance consultation, from July 14 to August 29, the department of Finance is currently working on Bill 150, which provides significant changes in this field.

Compulsory co-owners insurance

As a first step, the Law will require that "each co-owners shall take out third person liability insurance “. The minimum compulsory amount will be determined by government regulation. In addition, the syndicates will have to make available to the co-owners a "sufficiently precise description of the private portions", so that the improvements that have been made therein are easily identifiable.

Self-insurance fund

Article 1071 of the Civil Code of Québec will benefit from a complete rewrite. Will be added thereto, in addition to the obligation to set up a contingency fund sufficient to carry out major repairs to the common portions, or to replace them, the obligation to create a self-insurance fund. This will be used to pay the deductibles of the insurance policies subscribed by the syndicate.

Reconstruction value

In addition, the words "is equal to the replacement cost of the immovable ", provided for in article 1073, will be replaced by "must cover for the reconstruction of the immovable in accordance with the standards, usage and good practices applicable at that time ". In addition, this amount must be evaluated at least every five years, "by a member of a professional order designated by government regulation.”

Unreasonable deductibles

Another important change concerns "the criteria according to which a deductible is considered unreasonable. Bill 150 also provides that "an insurance contract entered into by a syndicate covers, by operation of law, at least the risks prescribed by Government regulation, unless the policy or a rider sets out, expressly and in clearly apparent characters ,which of those risks that are excluded.”

For its part, Article 1075 will also benefit from a significant amendment. Its new version will stipulate that the syndicate will be required, "following a loss that is substantial ", according to the criteria determined by government regulation, "to appoint a trustee, unless a trustee is appointed in the act constituting the co-ownership. And finally, another amendment will provide that "Within 30 days after the special meeting of the co-owners", the developer must transmit to the syndicate  "the description of the private portions provided for in article 1070."

By François G. Cellier for

Montreal, October 31, 2017