Condo Insurance Deductible in Quebec: Who Pays?

In a divided co-ownership, losses always seem to happen at the worst possible time. When the syndicate’s insurer pays an insurance claim, the question that immediately comes up is simple but delicate: who pays the deductible? In Quebec, the answer depends on the type of damage, any fault on the part of a co-owner or occupant, and what the declaration of co-ownership (DCC) and the by-laws of the immovable provide.

This article explains, in practical terms, how the syndicate’s insurance deductible works, when it is charged to common expenses, and when it can be claimed from a co-owner. You will also find advice to equip the board of directors (board) and avoid disputes.

Syndicate insurance and the deductible: the essentials

The syndicate of co-owners must insure the building (common portions and, depending on the coverage, certain standard elements of the private portions). The insurance policy includes a deductible: this is the amount the syndicate assumes before the insurer pays an indemnity. The higher the deductible, the lower the premium may be, and vice versa. A significant deductible therefore reduces the frequency of minor claims but increases the financial risk when a loss occurs.

The Civil Code of Quebec governs insurance in divided co-ownerships and the resulting responsibilities (see sections 1073 and following of the C.C.Q.). The sections dealing with charging the deductible and damages to the co-owner responsible for a loss have been clarified through successive reforms. The key points are:

• The syndicate remains the policyholder for the building.
• The deductible is a syndicate expense, except in circumstances allowing it to be charged to a co-owner.
• The by-laws of the immovable may specify the circumstances in which the deductible can be charged to a co-owner, within the limits of the C.C.Q.

To consult the official text, see the Civil Code on LégisQuébec (see sections 1073 and 1074.1 to 1074.3 of the C.C.Q.).

Who pays the deductible after a loss? Common scenarios

The rule must be assessed based on fault, the origin of the loss and the co-ownership’s internal rules.

1) Damage to common portions, with no identifiable fault

• If a common pipe bursts through no one’s fault, the deductible related to the syndicate’s claim is a common expense. It is then allocated among all co-owners according to their relative share, like any operating expense.
• The board records it in the accounting records and explains it in the minutes of the meeting. Depending on the scale of the expense, it may be covered by the current budget or require a special assessment.

2) Fault by a co-owner, tenant or contractor hired by the co-owner

• If a loss results from fault, negligence or a failure to comply (for example, non-compliant work or inadequate maintenance of a water heater in a private portion), the syndicate may claim the deductible and any uncovered damage from the responsible person, subject to proof and the provisions of the DCC (see section 1074.1 of the C.C.Q.).
• The co-owner at fault may in turn seek coverage under their civil liability insurance (co-owner’s insurance policy) to reimburse the syndicate.

3) Loss originating in a private portion, with no proven fault

• Several DCCs or by-laws provide that, when a loss originates in a private portion or in a co-owner’s improvements, the syndicate may charge the co-owner concerned an amount up to the deductible, even without fault. This option must be expressly provided for and comply with the C.C.Q. (see section 1074.2 of the C.C.Q.).
• Before charging the amount, the board must confirm: a) the origin of the loss, b) the applicable clause, c) proper notice to the co-owner, and d) whether a claim should be made under the co-owner’s insurance (an endorsement covering the syndicate’s deductible).

4) Private portions not insured by the syndicate

In practice, many disputes arise from confusion between “fault” and the “origin” of the loss. The fact that a loss originated in a private portion is not always enough; there must be a legal basis (the by-laws/DCC) or proof of fault to charge the amount.

What the DCC and the by-laws of the immovable should provide

To reduce uncertainty, the DCC and the by-laws of the immovable should clearly specify:

• The circumstances in which the syndicate’s deductible may be charged to a co-owner (for example, a loss originating in a private portion, even without fault, up to the amount of the deductible, if permitted by the C.C.Q.).
• Investigation procedures: access to the unit, collection of evidence, expert assessments, time limits and written communication.
• Maintenance obligations for private portions (for example, periodic replacement of the water heater), supported by the EUC or maintenance logbook, and the consequences of a documented failure to comply.
• The obligation for each co-owner to maintain sufficient civil liability insurance, including, if possible, the endorsement covering the syndicate’s deductible when it is charged to the co-owner.

When a regulatory adjustment is required, the board can prepare a draft amendment, present it at the annual general meeting, and then have the resolution entered in the register and in clear minutes. The wording must comply with the C.C.Q. and avoid any abusive clause. If in doubt, consult a legal professional.

For an overview of the rules and best practices in divided co-ownership, also see the resources of the Regroupement des gestionnaires et copropriétaires du Québec (RGCQ) and OACIQ’s public documentation on divided co-ownership.

Process after a loss: from reporting to allocating the deductible

A structured process helps the board make sound decisions and comply with the law:

1) Secure the premises and limit the damage

• Shut off the water/electricity as needed and promptly bring in qualified contractors. Verify the contractor’s RBQ licence.

2) Report the loss

• Notify the syndicate’s insurer without delay, provide findings, photos and emergency reports, and follow the instructions of the assigned claims adjuster.

3) Investigate and document

4) Decide whether to charge the deductible

• Apply the framework set out in the DCC/by-laws and the C.C.Q. Adopt a board resolution and record the reasons in the minutes.

5) Record and communicate

• If the deductible remains a syndicate expense, charge it to common expenses or, if necessary, propose a special assessment. Explain the decision, amounts and legal basis in written communication to the co-owners.
• If it is charged to a co-owner, send a clear demand letter, the evidence and the regulatory references, as well as contact information for a possible settlement through the co-owner’s insurer.

6) Follow up at the annual general meeting

• Present the general meeting with a report on the losses during the fiscal year, the deductible amounts paid or charged, and the planned preventive measures. This strengthens transparency and reduces challenges.

Accounting and budget impacts

A deductible paid by the syndicate affects cash flow and common expenses. Typical impacts include:

• A one-time increase in common expenses if the deductible is absorbed by the current budget.
• A special assessment when insufficient working capital prevents the expense from being absorbed during the fiscal year.
• A possible effect on the premium at renewal, depending on the frequency and severity of reported losses.

Accounting and governance best practices:

• Break down loss-related expenses (emergency work, decontamination, restoration) and the deductible portion in the accounting records.
• Keep reports and decisions in the register (board minutes, notices to co-owners, the insurer’s offer/settlement).
• Compare the option of “paying out of pocket” with “reporting to the insurer” when the cost of the work is close to the deductible. This decision should be based on the policy, the loss history and professional advice.

For support with financial management and insurance, see our Financial Management Services.

Preventing disputes: practical advice for the board

• Clarify when the deductible can be charged in the by-laws of the immovable, in compliance with the C.C.Q., and distribute an explanatory guide to the co-owners.
• Require and verify proof of civil liability insurance from each co-owner annually, ideally with an endorsement covering the syndicate’s deductible when it is charged to the co-owner.
• Update the EUC/maintenance logbook and establish targeted periodic inspections (water heaters, backwater valves, balcony sealants, drain stacks, etc.).
• Standardize critical materials and components whenever possible to avoid “standard versus improvement” debates when claims are made.
• Train the board on the relevant sections of the C.C.Q. and on the document management of losses.
• Prequalify contractors and verify their RBQ licence before assigning any reconstruction work.

Frequently asked questions

Q1. Can the syndicate charge the deductible to a co-owner who was not at fault?

Yes, if the DCC/by-laws expressly provide for it and the C.C.Q. permits it, particularly when the loss originates in a private portion. The amount charged is generally limited to the amount of the syndicate’s deductible (see section 1074.2 of the C.C.Q.). In the event of a dispute, a factual and legal analysis is required.

Q2. Can a tenant at fault be required to pay the deductible?

The syndicate will usually address the co-owner-landlord. The landlord may pursue a claim against the tenant under the lease and based on the fault committed. The co-owner’s insurer may also become involved, depending on the coverage purchased.

Q3. What should be done if the insurer refuses to indemnify a particular item of damage?

Review the policy (exclusions and limits), request the reasons in writing, provide additional evidence and, if necessary, seek legal advice or mediation. Also assess the impact of pursuing a claim versus the net cost after the deductible.

This article provides general information and does not constitute legal advice. Consult a lawyer or notary for your specific situation.

Do you manage a co-ownership in Quebec? Explore our packages or contact us to assess your needs.

Useful resources:

• Civil Code of Quebec (syndicate insurance and allocation of the deductible) – LégisQuébec
• RGCQ – Best practices for co-ownership management
• OACIQ – Divided co-ownership concepts
• RBQ – Verify a contractor’s licence

Internal links:

• Our Packages
• Financial Management Services
• The multiRent Blog