Insured Damage to a Unit – A Brief “Primer”

In most Ontario condominiums, the owners are obligated to repair their units.  [It’s important to check the Declaration to confirm this.  But as I say, this is the case in most Ontario condominiums.]  For purposes of the following example, I’ll assume that the owner is responsible to repair the unit.

Suppose the owner suffers damage to his or her unit…and suppose the source of the damage is outside the unit (like a leak from a common element roof or a burst common element water pipe).

Courts have said – on many occasions – that condominium corporations are not “guarantors” of the common elements.  This means that condominium corporations are not necessarily responsible for damage (like damage to a unit) that results from failure of a common element.  Therefore, the owner is still responsible to repair his or her unit, subject to the following important exceptions:

Exception No. 1

The condominium corporation is “ultimately” responsible for unit damage that results from the corporation’s negligence (for instance if the corporation fails to take reasonable steps to maintain or repair the common elements, and damage results).

Exception No. 2

If the damage is “insured damage” under the corporation’s insurance policy, the damage must be covered either by the corporation’s insurance or by the corporation (if the corporation decides not to make an insurance claim).  So, for instance, this would include damage to the owner’s standard unit that is covered by the corporation’s insurance. [More on the importance of a standard unit description in a coming blog!]

I think it’s helpful to remember that the corporation’s insurance “belongs” to BOTH the corporation and the owners.  That’s why a condominium owner is always entitled to any benefits / coverage available under the corporation’s insurance.

HOWEVER: The owner might, in some cases, be responsible for the deductible portion of any loss under the corporation’s insurance (pursuant to Section 105 of the Condominium Act and/or any “insurance deductibles by-law” of the corporation).  More on this in a coming blog!

Stay tuned to Condo Law News to keep up to date on the latest developments in condominium law!