Regarding Insurance Coverage (Bill 141)
Since coming into effect on April 15, 2022, Bill 141 requires that syndicates of co-ownership establish a self-insurance fund. The amount to be collected by the co-owners must correspond to the highest insurance deductible, usually that covering water infiltration damage.
The good news, however, is that this amount is only payable once (unless there is an insurance claim, at which point the fund will have to be replenished). This bill aims to force syndicates of co-ownership to maintain sufficiently large cash reserves to pay all fees associated with the most serious type of damage covered by the insurance policy.
Regarding Repairs (Bill 16)
Upon purchasing a condo unit, the owner assumes responsibility for their private dwelling as well as for the building’s common areas (roof, windows, exterior cladding, parking lot, etc.). To keep condo fees to a minimum, some syndicates of co-ownership have deliberately—or through simple negligence—failed to carry out regular repairs in the common areas. Bill 16 addresses this deficiency by forcing co-owners to set up a contingency fund. This money is to be set aside to pay for the long-term maintenance of these areas. This bill has two distinct components:
1. Contingency Fund Study
How does the syndicate calculate how much to set aside annually for major renovations? A survey of the work to be completed in the next 25 years, or over an even longer period, must be carried out to determine future repairs and their estimated costs. This study must be repeated every five years.
2. Maintenance Log
This document is a record of all the work carried out in the past. It is a precious tool for ensuring that the renovations planned in the contingency fund study have in fact been completed and on time.
The extra amount for the contingency fund is usually collected monthly, while the one for the self-insurance fund is payable once, before every expected insurance claim. These expenditures are in addition to the contingency fund and condo fees, making owning a condo more expensive. Regardless, the ultimate objective is to lessen the probability of an owner defaulting, and even declaring bankruptcy or being forced to sell in the event of an insurance claim or repair because they are unable to pay the large sums required. This is essential protection as many condo buildings have been neglected over recent years, putting owners at risk of losing their unit.