New amendments to the Civil Code of Québec are set to impact the insurance obligations of divided co-ownerships. The amendments, which were introduced in June 2018 and are gradually being phased in, include the requirement for co-owners to take out liability insurance, with the minimum amount to be determined by regulation. Additionally, co-ownership syndicates will be required to set up a self-insurance fund to pay deductibles and compensate for property damage in which the syndicate has an insurable interest, as well as ensure their board of directors and other key individuals are covered by third-party liability insurance.
The amendments also include new duties for the syndicate of co-owners in the event of property damage. When a loss involves property covered by an insurance policy taken out by the syndicate of co-owners, and the syndicate decides not to avail itself of this insurance, it must ensure that the damage is repaired.
It’s important for directors of co-ownership syndicates to review their insurance needs and obtain advice from an insurance professional to comply with the new provisions. Insurers will also need to adjust their practices to comply with the new regulations in terms of underwriting and claims management.
Overall, the amendments to the Civil Code of Québec represent an important shift towards greater protection for co-ownerships and provide a more detailed framework for insurance obligations in divided co-ownership situations.