Insurance Going from Bad to Worse for Syndicates and Co-owners

MONTREAL, Oct. 11, 2022 /CNW Telbec/ - The Association québécoise des gestionnaires de copropriétés (AQGC) congratulates the Coalition Avenir Québec (CAQ) on its re-election on October 3. The association is hopeful that the party will continue to understand the issues affecting the condominium sector, including this insurance issue, which requires an "Amendment to Article 1074.2 of the Civil Code of Québec relating to compensation for claims in co-ownership (French Only)" as mentioned in this petition endorsed by 9070 signatories and tabled in the National Assembly in March 2022.

The AQGC would like to mention that this issue which wastes money from thousands of syndicates and their co-owners, clogs up the courts and creates a contentious climate in many condominiums, must be a priority for the Government.

"Currently, syndicates are forced to pay into a self-insurance fund that often empties faster than it fills up due to poorly drafted legislative changes made in December 2018. There's an urgent need to act, and syndicates and co-owners can no longer afford to pay unfairly. The situation is all the more urgent because interest rates are going up, and so are condo fees going up significantly due to the fallout from Bill 16, which introduced new and necessary but costly fees. The inflation and the labour shortage are also driving up building operating costs," says Élise Beauchesne, CPA, Adm.A., President, AQGC.

Notwithstanding all of the above, the situation is going from bad to worse for syndicates and co-owners.

A May 25 ruling by the Small Claims Division of the Court of Quebec has AQGC even more concerned. Following this ruling, the standard clauses appearing in declarations of co-ownership, including in the templates issued by the Chambre des notaires du Québec holding a property owners responsible for their tenant's actions, would be deemed unwritten, meaning for all practical purposes it would be inapplicable.

This raises another question as to whether the Small Claims Division of the Court of Quebec has this jurisdiction. According to M. Clément Lucas, a lawyer with the De Grandpré Jolicoeur firm, and also a director at the AQGC with expertise in condominium insurance, this question would more likely fall within the jurisdiction of the Superior Court with respect to clauses whose value is not limited to $15,000, but in reality indefinite, since they may apply to any claim. A judicial review appeal was formally filed with the Superior Court challenging the ruling. The defence insurer that had requested the preliminary dismissal of the proceeding had it denied by the Honourable Chantal Tremblay, S.C.J., on August 30, 2022. A hearing on its merits will be held based on Superior Court availability.

The challenge is crucial to amend Article 1074.2 C.C.Q., and co-owners, syndicates and condominium managers will not stop their efforts to shed light on the disastrous consequences of this article in practice. Indeed, what can syndicates do to make co-owners more involved in claim prevention if they are never held accountable? "This is worrisome for the appeal of co-ownership," says Stefania Chianetta, a lawyer with Chianetta Avocats, who had sounded the alarm as early as 2019 following the drafting of article 1074.2 C.C.Q.

Let's not forget that the adoption of this condominium insurance reform in 2018 flew under the radar, while Bill 150 was amended and reintroduced in Bill 141 without any actual consultations since it was a budget omnibus. In fact, Mr. Carlos Leitao says, "That was not the intention of the Ministère des Finances or its minister at the time."

The AQGC is at the elected government's disposal to work on the issue and provide a fair solution to condominium insurance issues in the collective interest of the syndicates, co-owners and insurers.

SOURCE Association Québécoise des Gestionnaires de copropriétés (AQGC)

Written by: Association Québécoise des Gestionnaires de Copropriétés, Elise Beauchesne, AQGC, M Stefania Chianetta, Chianetta Avocats, M Clément Lucas, De Grandpré Jolicoeur, 514-589-3206