According to the Canadian Condominium Institute (CCI), Condominium Corporations are able to seek recovery of the deductible portion from an Owner for damages that originates from the Owner’s unit or privacy area, up to a maximum of $50,000 and regardless of proven negligence. This major change has been in effect since January 1, 2020.
What to Know About Absolute Liability
“Absolute liability” means the Owner may be responsible to pay the Corporation’s deductible amount, regardless of whether or not there was proven negligence. For example, if your neighbour’s unit flooded due to a burst pipe in your unit with proof that you were not negligent, the Corporation can still recover from you.
Condo Owners have access to coverage under their Condo Insurance policy when required to help with paying the Corporation’s deductible. The Corporation can only recover its specific deductible limit up to a maximum of $50,000. Regardless of the size of the claim, if the deductible is $20,000, then the Owner is liable for $20,000. On the other hand, if the Corporation’s deductible is $75,000, the Owner’s liability will still be the maximum allowable amount at $50,000.
The Corporation can recover up to $50,000 for the deductible if there was significant damage. Most Condo Insurance policies include this coverage – however, Owners are responsible for the remainder of the coverage beyond the coverage limit. This can set Owners back thousands of dollars.
Steps to Take to Ensure Proper Coverage
Owners can be held responsible for the deductible payment, regardless of whether they have their own coverage under the Condo Insurance policy. To ensure you have proper coverage:
- Obtain a copy of the Corporation’s Certificate of Insurance from the Board, Manager, or Corporation Insurance Broker. This certificate outlines the Corporation’s current deductible amounts, important information to be aware of.
- Review your current Condo Insurance policy to determine whether you have deductible coverage. If not, contact your insurance company or insurance broker and request to add coverage.
- If you do have coverage, check to see if it’s equivalent to the Corporation’s deductible. If not, contact your insurance company or insurance broker to adjust your deductible accordingly.
While there are limitations on absolute liability under sections 62.4(3) and 62.4(5) of the Province of Alberta’s Condominium Property Regulation, proper and adequate insurance is crucial for all land owners, including the amount for the Corporation’s insurance deductible.
Blog posts from CMS Real Estate are for general information only. The content should not be considered real estate management or investment advice. If you are in need of professional real estate advice, please contact our team.