Condo association calls for changes to help corporations recoup losses 

Quebec’s association representing condo corporations is reiterating a call on the newly re-elected provincial government to amend the Civil Code of Quebec to allow condo corporations to better recover losses from co-owners. 

Currently, condo corporations (called syndicates in Quebec) are forced to pay into a self-insurance fund that often empties faster than it fills up, said Élise Beauchesne, president of the Association québécoise des gestionnaires de copropriétés (AQGC). She pointed to Amendment to Article 1074.2 of the Civil Code of Québec relating to compensation for claims in co-ownership (French only), a petition with more than 9,000 signatures 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,” AQGC said in a press release Tuesday. The association stressed “there’s an urgent need to act, and syndicates and co-owners can no longer afford to pair unfairly.” 

The petition to amend Article 1074.2 of Quebec’s civil code contends that “insurers systematically refuse to recognize any ‘fault’ of a co-owner when a syndicate wishes to be compensated for the costs of a loss resulting from the liability of the co-owner, his tenant, his agents or another for which he is legally responsible.”  

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Among other items, the petition also says imposing self-insurance on syndicates is the equivalent of requiring them to be jointly and severally liable for each other. As such, the undersigned asked for an amendment of the civil code “in order to allow syndicates of co-ownerships to engage the civil liability of those responsible under their declaration of co-ownership.”

Section 1074.2. of the Civil Code of Quebec currently reads: 

“The sums incurred by the syndicate to pay the deductibles and make reparation for the injury caused to property in which the syndicate has an insurable interest may not be recovered from the co-owners otherwise than by their contribution for common expenses, subject to damages it can obtain from the co-owner bound to make reparation for the injury caused by the co-owner’s fault and, in the cases provided for in this Code, for the injury caused by the act, omission or fault of another person or by the act of things in the co-owner’s custody. 

Any stipulation which is inconsistent with the provisions of the first paragraph is deemed unwritten.” 

The last sentence “has AQGC even more concerned” following a May 25 ruling by the small claims division of the Court of Quebec. Following the ruling, standard clauses appearing in declarations of co-ownership, including in the templates issued by the Chambre des notaires du Quebec holding a property owner responsible for their tenant’s actions, would be deemed unwritten, AQGC said. This means “for all practical purposes, it would be inapplicable.” 

Clément Lucas, a lawyer with the De Grandpré Jolicoeur law firm, questioned whether the small claims division of the Court of Quebec even has the jurisdiction to rule on the matter. Lucas, who is also a director at AQGC with expertise in condominium insurance, argued the 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.” 

AQGC said a judicial review appeal was formally filed with the Superior Court challenging the ruling. A defence insurer that requested a preliminary dismissal of the proceeding had it denied on Aug. 30, the association reported, and “a hearing on its merits will be held based on Superior Court availability.” 

The situation is all the more urgent because interest rates are going up, as are condo fees due to Bill 16, said Beauchesne. That bill introduced “new and necessary but costly fees,” she said. Among others, the bill made syndicates establish a contingency fund to cover major repairs and the replacement of common area portions. “The inflation and the labour shortage are also driving up building operating costs,” she said. 

“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,” the association said. 

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