- The condo corporation must insure the units and common elements against major perils such as fire and flood, and how higher costs reach owners depends on your building's documents.
- A board can raise money through a special assessment added to common expense fees without owner approval, and each owner pays the same percentage as their regular fees, although the governing documents may contain provisions about special assessments.
- Where an owner's own act or omission causes an insured loss, the lesser of the deductible or the repair cost is charged back to that owner's unit.
You open a notice from your condo board and the numbers have jumped. Maybe monthly fees are going up, maybe there is a special assessment, or maybe a deductible from a water leak has landed on your unit. The explanation given is that the corporation's insurance now costs much more.
This article explains in plain terms what the corporation has to insure, how the cost can reach you, what your own insurance is for, and what options you have if you think the increase is not being handled properly. Every building is different, so your declaration, by-laws and rules matter.
What the corporation has to insure
Under sections 99 and 102 of the Condominium Act, 1998, the condo corporation must insure the units and common elements against major perils such as fire and flood. It must also carry liability insurance for unsafe common areas or machinery, and directors' and officers' insurance is required under section 39.
What a corporation can do when premiums rise, such as how it adjusts its coverage or its budget, depends on its governing documents and the facts, so it is worth confirming with a lawyer or insurance broker. How the corporation pays for the higher cost depends on its budget and its governing documents, and the next section looks at the routes that can reach owners.
The corporation's policy has limits. It does not cover improvements or non-standard parts of a unit, and fixtures, furnishings, equipment and personal property are not part of a standard unit. What counts as standard for your building depends on your governing documents, so it is worth reading them.
How higher costs can reach you
Condo fees, also called common expenses, pay for things like maintaining the common elements, cleaning, building maintenance, condo management and reserve fund contributions. The declaration sets each unit's share as a percentage, which may vary with unit size. For example, a 5% share of a $1,000 monthly budget is $50.
When the corporation's insurance costs climb, the usual routes to owners are a larger annual budget, which raises fees for everyone according to their percentage, or a one-time charge. A board can levy a special assessment through common expense fees without owner approval, although the governing documents may contain provisions about special assessments. Each owner's share uses the same percentage as their common expense fees.
- Higher fees: the increase is spread across all units by percentage share.
- Special assessment: a separate charge collected through common expense fees, split the same way.
- Deductible chargeback: a cost placed on a particular unit after a specific loss.
Deductibles and chargebacks
Higher deductibles can matter as much as higher premiums. The corporation pays the part of an insured loss that falls below its deductible. Where an owner's own act or omission causes the damage, the lesser of the deductible or the repair cost is charged back to that owner's unit. A by-law can make owners liable in more situations, such as accidental damage where no one is at fault.
| Situation | Who generally bears the deductible |
|---|---|
| Loss below the deductible, no owner at fault | The corporation pays, unless a by-law says otherwise |
| Owner's act or omission causes the damage | The lesser of the deductible or repair cost is charged to that owner's unit |
| Accidental damage where no one is at fault | Can be charged to owners only if a by-law makes them liable |
If your building has a by-law on deductibles, read it carefully, because it may reach further than the default rule.
Your own insurance and unpaid charges
The Condominium Act does not itself require owners to carry insurance, but the corporation's governing documents may. Tenants are not legally required to have insurance unless their lease or the governing documents require it. Since the corporation's policy leaves out improvements and personal property, owners generally look to their own policy for those items. Chargebacks for deductibles are a separate matter, so ask an insurance broker what your policy should include and whether it responds to a chargeback.
Do not withhold increased fees or assessments because you disagree with them. A condo corporation automatically has a lien on a unit when the owner does not pay common expenses. An unpaid special assessment also gives the corporation a lien covering the unpaid amount, interest and all reasonable legal costs of collecting it. The lien expires after three months unless the corporation registers a Certificate of Lien, and the owner first gets a Notice of Lien. The corporation can register the certificate if the owner does not pay within 10 days.
If you do pay, the corporation must discharge the lien, and the payoff includes condo fees owed after registration, interest, and reasonable legal fees and the costs of preparing and discharging the lien.
Your options and what to do next
If you want to challenge how costs are being handled, one route is an owner-requisitioned meeting. A requisition must be in writing, state the topics, be signed by owners of at least 15% of the voting units, and be delivered to the board. Tenants cannot sign it, and neither can owners who are 30 days or more in arrears.
Changes to rules follow a set process, and rules must be reasonable and consistent with the Condominium Act, the declaration and the by-laws. The declaration is harder to change: amending it needs 80% of the units to consent, or 90% for changes to cost-sharing proportions, access to common elements or maintenance responsibilities. How all of this applies to your building depends on your situation, so it is worth confirming with a lawyer.
- Ask the board for the insurance renewal summary, the new premium and the deductible amounts.
- Ask how the increase is being funded: the budget, a special assessment, or both.
- Read your declaration, by-laws and rules on insurance, deductibles and chargebacks.
- Review your own unit policy with a broker, including coverage for improvements and chargebacks.
- Keep paying the amounts billed while you raise questions, to avoid a lien.
- Speak with a lawyer if you think a chargeback or assessment is not allowed under your governing documents.
Frequently asked questions
Can the board raise money for higher insurance without a vote of owners?
A board can levy a special assessment through common expense fees without owner approval, although the governing documents may contain provisions about special assessments. Owners can still use the requisition process to call a meeting, if they gather enough signatures.
Do I have to carry my own condo insurance?
The Condominium Act does not itself make owners carry insurance, but the corporation's governing documents may require it. Tenants are not legally required to have insurance unless their lease or the governing documents say so. Even if it is not required, the corporation's policy does not cover improvements or personal property.
Who pays the deductible when there is a leak in my unit?
The corporation pays the part of an insured loss below its deductible, but where an owner's own act or omission causes the damage, the lesser of the deductible or the repair cost is charged back to that owner's unit. A by-law can make owners liable in more situations.
What happens if I refuse to pay an increased fee or assessment?
The corporation automatically has a lien on the unit when common expenses are unpaid, and an unpaid special assessment also gives it a lien for the amount, interest and reasonable legal costs. If you pay, the corporation must discharge the lien.
Sources
- Condominium Authority of Ontario – Rules — condoauthorityontario.ca
- Condominium Authority of Ontario – Owner-Requisitioned Meetings — condoauthorityontario.ca
- Condominium Authority of Ontario – The Declaration — condoauthorityontario.ca
- Condominium Authority of Ontario – Special Assessments — condoauthorityontario.ca
- Condominium Authority of Ontario – Common Expenses — condoauthorityontario.ca
- Condominium Authority of Ontario – Liens — condoauthorityontario.ca
- Condominium Authority of Ontario – Insurance — condoauthorityontario.ca
- Ontario's Residential Condominium Buyers' Guide (CAO, October 2023) — condoauthorityontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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