Co-ownership insurance: certain provisions come into force

April 15, 2021 — The Government of Quebec published in the Official Gazette of Quebec, on April 15, 2020, a by-law on divided co-ownership insurance, which clarifies the terms and dates of coming into force of some of the provisions introduced by Bill 141, in June 2018. This bill provided that six elements contained in it would be passed by government regulation. For the time being, only four take effect on April15, 2021. For now, at least.

Reconstruction cost

Section 1073 of the Civil Code of Quebec  requires the syndicate to purchase insurance covering the  " reconstruction  cost " of the building. This is the amount required to rebuild the entire building, in the event of a total loss. This obligation takes effect on April 15, 2021, or no later than April 15, 2022, if the present insurance coverage matures after April 15, 2021.

Skilled professionals

Only members of the “Ordre des évaluateurs agréés du Québec” (Québec Order of Chartered Appraisers) are authorized to assess the amount of property insurance required for a syndicate, in order to cover the building. Article 3 of the by-law takes effect on April 15, 2021.

Building assessment

The reconstruction value must be assessed by these professionals at least every five years. This obligation takes effect on or after April 15, 2021. However, for a co-ownership for which the assessment was conducted within four years prior to  April 15, 2020, by a certified appraiser, the syndicate will have five years after the date of that assessment to have a new one completed (Article 5 of the by-law).

Risks covered

Section 4 of the by-law provides a comprehensive list of risks covered "as of right" in an insurance contract. Not all syndicates will necessarily take out all these protections, but from now on, an insurance contract will have to specify which coverage is excluded. This also comes into effect on April 15, 2021.

Directors' liability insurance

This insurance product becomes mandatory, as of April 15, 2021. It covers the responsibility of board members to third parties. The co-ownership declaration may also specify the amount of coverage. This insurance is not only intended to protect directors, it also allows the syndicate and co-owners to be covered in the event a director commits misconduct, errors, negligence or omissions in the performance of his duties.

Civil liability insurance for assembly officers

This liability insurance also becomes mandatory on April 15, 2021. It covers the responsibility of the president and secretary of a co-owners' assembly, as well as that of the other persons responsible for its smooth running. The co-ownership declaration may also specify the amount of insurance coverage. This product is not only intended to protect assembly officers, it also allows the syndicate and co-owners to  be covered, in the event an assembly officer commits faults and errors, or is found guilty of negligence or omissions in the performance of his duties.

To view this by-law in more detail, click on this hyperlink.

By Me  Yves Joli-Coeur for
Montreal, April 15, 2021