Risks and recommendations for condos in Canada – new insight statement

Risks and recommendations for condos in Canada – new insight statement | Insurance Business Canada

Insurance News

Risks and recommendations for condos in Canada – new insight statement

The importance of education around insurance has been emphasized

Insurance News

By
Mia Wallace

The Canadian Institute of Actuaries (CIA) has published a new insight statement exploring the risks associated with condos and providing recommendations to owners, condo boards and legislators for safeguarding the longevity of condo infrastructure in Canada.

The statement, ‘Longevity of Condo Infrastructure’, emphasizes the critical importance of repairing, replacing and renewing common elements – including roofs, pools, elevators and parking lots – within condo buildings. It also pinpoints the importance of having sound reserve funds.

“For many Canadians, owning a condo is their most significant life investment,” said Jean-Sebastien Cote, FCIA and co-author of the statement. “It’s crucial that all stakeholders understand the value of this asset and its associated risks. By working together and taking proactive steps, we can ensure the longevity of Canada’s condominium infrastructure.”

In addition, the statement outlines several specific risks and recommendations. Among these is information on climate change-related impacts on properties, financial management by condo boards and interest rates and inflation.

The statement also highlights the need for a broader education system to keep boards and condo owners up to date on requirements related to insurance, legislation, finance and other relevant issues.

“Condo owners need to understand that this type of investment involves sharing risks with others beyond their own unit,” said Henry Chio, FCIA and co-author. “They should be proactive in learning about the financial health of their condo association, getting to know their condo community and engaging with their board.”

“Ultimately, condo owners, buyers, governments, municipalities, condo managers, board members and other stakeholders should better understand the risks associated with condos and properly forecast and mitigate them,” said John Nguyen, co-author. “Stronger government intervention is needed to guide proper estimation of the future costs of maintaining and repairing this infrastructure as it ages.”