Understanding Bill 141: obligations and impacts for condominiums in Quebec
Guest contributor: François Séguin, Évaluateur Agréé (É.A.)
Since the fall of 2024, two major laws have transformed condominium management in Quebec: Bill 16 and Bill 141.
These reforms share a common goal: to provide a better framework for the management of divided co-ownerships (such as condos) and ensure their long-term security.
Bill 16 deals mainly with governance, finances and building maintenance.
Bill 141 focuses on the insurance of syndicates of co-ownership, including property appraisal and civil liability.
Together, they clarify the responsibilities of each party and strengthen protection in the event of a claim.
In this article, you'll discover :
Law 141 in co-ownership: summary of obligations
Passed in 2018 and in force since April 15, 2021, Bill 141 has made major changes to the Civil Code of Québec. Notably in articles 1070 and 1073, with regard to co-ownership insurance.
Co-ownerships must now :
Carry out a periodic assessment of the estimated cost of rebuilding the building
Provide a detailed description of the original private spaces, including the quality of finish initially offered
Set up a mandatory self-insurance fund
Take out civil liability insurance for each co-owner.
Why these measures? They are designed to prevent co-ownerships from being under-insured, and to facilitate claims management.
The concrete impact of Bill 141 on condominium insurance
As a Chartered Appraiser specializing in building reconstruction costing, I regularly observe inadequate insurance coverage in condominium syndicates. This situation has worsened with the recent explosion in construction costs.
Bill 141 provides an essential clarification: it makes a clear distinction between what is covered by the syndicate's insurance and what is the responsibility of individual co-owners. The amendments to article 1070 of the C.c.Q. clearly define the initial construction standard, while any subsequent improvements must be covered by the co-owner's personal insurance.
This distinction avoids both :
Under-insurance (risky for all co-owners)
Over-insurance (costly and unnecessary)
Is condominium insurance mandatory or not?
Yes, insurance is now mandatory for all condominiums in Quebec:
Divided co-ownerships
Residential buildings
Commercial buildings
Each syndicate must take out insurance covering the whole of each building, excluding improvements made by co-owners to their private portions.
Important: Failure to comply may result in sanctions. As of April 15, 2021, each syndicate must submit a report by an Évaluateur Agréé firm to their insurer, failing which the insurer may refuse to renew the insurance policy.
Unions that contravene the new laws expose themselves to significant complications in the event of a claim, which could lead to denial of coverage or insufficient compensation.
Bill 141: what impact does it have on small condominium insurance?
Law 141 particularly affects small condominiums, with two main obligations:
Estimating the cost of reconstruction to establish the insurable value and update the amount of insurance coverage every five years
The creation of a self-insurance fund to cover the deductible in the event of a claim.
This fund plays a crucial role in avoiding unforeseen financial events. For example, if water damage occurs, the syndicate can use this fund to pay the deductible, even if the group insurance does not cover all the damage.
These rules protect both individual co-owners and the syndicate as a whole. Protégez-Vous magazine also covered this topic, highlighting the particular challenges faced by small co-ownerships in the face of these new obligations.
Why appraise reconstruction value?
The reconstruction value appraisal, mandatory every five years, determines the amount needed to rebuild the building in the event of a major disaster.
This appraisal must be carried out by a certified appraiser - like those at Borée - and serves as the basis for establishing adequate insurance coverage.
The main objective is to prevent the building from being under-insured, which could have disastrous consequences in the event of a major loss.
It is recommended that the amount of insurance coverage be indexed annually to take account of fluctuating construction costs. This indexation is generally carried out by the insurer.
Practical tip: You can mandate the appraiser who carried out the initial report to index the cost of reconstruction during the five-year period following the appraisal, for an additional fee. This allows you to keep your insurance coverage up to date without having to redo a complete appraisal.
What is the role of the condominium self-insurance fund?
The self-insurance fund, now required by law, covers the deductible in the event of a claim, without directly impacting co-owners' finances.
This financial cushion is particularly useful in condominiums with rental units. In the event of a claim, it facilitates a rapid response without weighing down day-to-day management.
Case in point
In a 24-unit condominium, many of which are rented out, major water damage occurred in a bathroom column. Thanks to the self-insurance fund, the syndicate was able to :
Quickly pay the $10,000 deductible
Initiate work without delay
Avoid calling an emergency meeting
Prevent an immediate special assessment
This reactivity considerably reduced tensions between occupying co-owners and investors, while minimizing the time required to restore the affected apartments.
Condominium liability insurance: mandatory protection
Every co-owner is now required to take out civil liability insurance. This coverage is essential to indemnify third parties in the event of damage caused by the co-owner.
For example, if an accident occurs in the common areas and a co-owner is deemed responsible, his or her civil liability insurance can cover the cost of compensation. This obligation helps prevent costly disputes and protects both the syndicate and all co-owners.
Condominium insurance: who pays?
As a general rule, the syndicate pays for building insurance. However, the division of costs between co-owners depends on the internal regulations of each condominium.
In a divided co-ownership, each co-owner must also insure his or her private dwelling and improvements. Some condominiums, such as horizontal condominiums, may require specific insurance for shared spaces.
Case study to avoid
In a horizontal condominium comprising six separate buildings, a co-owner mistakenly believed that the syndicate covered the fences separating the individual lots. When an incident damaged his back fence, he discovered that this section was not covered by the common insurance.
This misunderstanding not only caused tension within the syndicate, but also led to a significant delay in repairs. A better understanding of insurance responsibilities would have avoided this problematic situation.
Conclusion
In summary, Bill 141 is designed to ensure that condominiums in Quebec are adequately insured and prepared to deal with potential losses.
Thanks to :
Mandatory five-yearly estimates of insurable value
The creation of a dedicated self-insurance fund
Compulsory third-party liability insurance for each co-owner
...syndicates and co-owners now have solid tools to effectively protect their buildings and their finances.
These measures are in addition to those of Bill 16, which improves the governance and long-term planning of condominiums.
As a condominium manager or administrator, it's essential to understand these legal obligations to ensure your building's compliance and the peace of mind of all its occupants.
Need help complying with these requirements? Consult Borée, experts in condominium management.
