Having a multiunit water damage prevention system is practically a necessity nowadays. But it’s not unheard of (to put it mildly) for the syndicate of co-owners to encounter resistance from them. What happens then? Can the association make it mandatory? What responsibilities do the association members have? We asked Yves Joli-Cœur, advocatus emeritus lawyer and expert on condominium law.
He doesn’t mince words:
“A water damage prevention system doesn’t just protect you from water damage; it helps keep your building insurable. The board of directors of a condominium without such a system needs to get on it—investigate, assess the risks, and do its job, which is to make sure condominium owners understand.”
Facts that speak for themselves
Why has a water damage prevention system become a necessity in condominiums? It all starts with the insurance companies. They’re the ones driving the change. And the following factors are driving them:
- For condominiums, water damage is the number one cause of insurance claims, far ahead of fire and theft.
- The cost of each claim to insurers is getting higher and higher, driven by rising prices of materials.
- Not only are the costs higher, but the number of claims has also increased significantly as a large number of condos are in rough shape.
With that in mind, you can see how water damage coverage might be getting less profitable for insurers nowadays. And why more and more condominiums are becoming insurance orphans. Don’t forget that insurance is above all a commercial product. And like any for-profit business worth its salt, an insurance company will always look to make a profit on its products. These champions of risk assessment won’t stick around if the risk of covering a building gets too high.
“Many insurers require preventive measures before they’ll insure a building. One of them is often a water leak detection system that shuts the water off automatically in common and private areas if a leak is detected. Insurers can make installing such a system a condition for renewing the policy and maintaining the coverage the condo association needs. It’s as simple as that!”
Which is where things get sticky
Condominium associations mainly want to comply with the needs of insurers. But they can run up against co-owners who refuse to pay for a water damage prevention system. Those condo owners aren’t seeing the big picture. Convincing them can be a daunting task. Does the condominium association have the authority to go ahead and install the system in private areas?
“The condominium association may contract installation of the system, even in private areas. Under the Civil Code of Québec, after publication of a declaration of co-ownership, the co-owners as a body (association) constitute a legal person for the purposes of preserving the property, maintaining and administering its common areas, protecting the rights appurtenant to the building or co-ownership, and dealing with all business of common interest. Bill 16 adds that the association is responsible for making sure any work necessary for the preservation and maintenance of the building gets done.”
In other words, it’s the condo association’s duty to act in the common interest throughout the building. Quoting distinguished legal author Christine Gagnon, Yves Joli-Cœur adds:
“If the association is required by the insurer to either install a water damage protection system in the building or forfeit the building’s water damage insurance coverage, the matter then falls under the association’s jurisdiction, involving its duty to preserve and making it business of common interest throughout the building. Insuring the building certainly is part of preserving it. The board of directors may therefore decide, if it is a matter of preserving the building, to install such a system everywhere, including in private areas, subject to the duty to hold an owners meeting if a special budget is to be adopted or amendments to building bylaws are required, which may be useful but not mandatory before installing the system.”
Although home insurance is essential for homeowners, insurers are under no obligation to renew anyone’s policy. And it’s essential for syndicates of co-owners to make sure their building stays insurable—it’s one of their bottom-line responsibilities.
It could also be risky to leave individual co-owners to install their own water leak detection systems. Some might not do it, or try to get away with a substandard system, or skimp on the number of detectors. If part of the condominium building isn’t properly covered, there’s a risk that a leak in an unprotected private area could cause damage to all the condo owners. Water damage claims that affect only a single unit are vanishingly rare.
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Or watch an interview with Mélanie Bergeron.