CCI Newsletter 1 -2021/2022

Managing Costs and Risks in Condominium Insurance By: Gareth Stackhouse, LL. B.

company the condominium over a $10,022.33 repair charge - back related to a leak. originally sued Briefly, Lozano asked "Did the unit owners' act or omission cause a toilet to leak and what does “ act or omission ” mean?" and "If yes, can the condo charge - back the costs of repair/insurance deductible under TSCC 1765’ s section 105 by - law?" The unit owners replaced toilet parts and later other parts of the toilet failed and leaked. The leak was noticed when they left the unit five months and only had someone inspect it every two weeks. Most importantly, they didn't shut off the water to the toilet when they left. The Divisional Court found that the "omission" was that the unit owners did not shut off the water feed to the toilet (no water, no leak) and that 13 days between unit inspections is " an obvious act or omission". TSCC 1765 was able to recover the costs. The Lozano case (and costs) could likely have been avoided if TSCC 1765 had a by - law that contained a waiver of subrogation, rigorously defined “ act or omission ” for a section 105 chargeback, and set maintenance standards about fixing toilets, turning off water, and inspecting empty units. Let ’ s explore the components of a standard

Insurance and insurance costs have been a live issue in recent years, with some insurers exiting the condominium market and that, plus market conditions, has led to a rise in premiums and deductibles. Condominiums unable to get insurance have been in the news. As a defensive play, insurance costs and risks can be managed through a properly drafted standard unit, insurance, and maintenance by - law made under the Condominium Act, 1998 (the " Act "). This type of by - law puts these related items into a single by - law and can be the single reference point for managers, boards, contractors, residents, and insurance adjusters every time there is an “ event of damage ”. It can prevent conflicts about costs, repairs, and responsibility (saving time and money) and it provides certainty for all parties, including the condominium ’ s insurer, where uncertainty will drive up costs. A well drafted by - law like this could have prevented the lengthy (and no doubt costly) litigation in the recent Lozano v. TSCC 1765 case and the case is a great illustration of the risks and costs related to insurance, damage, and maintenance in condominiums. Lozano v. TSCC 1765(2021 ONSC 983): The Divisional Court decision in Lozano was released in February, it was an appeal of a lower court ruling by the unit owners ’ insurance company that “ subrogated ” the claim and funded the litigation. The insurance

Gareth Stackhouse, LL.B., is a lawyer with Common Ground Condo Law and serves clients across Ontario, is active in numerous CCI chapters, ACMO, and he frequently writes and speaks on condominium topics. He has called small - town Ontario (the Ottawa Valley and the near “ north ”), Kingston, Halifax, and Toronto “ home ”.

This article appeared in Volume 28 of the CCI Eastern Ontario

Chapter ’ s quarterly newsletter, Condo Contact Magazine

unit, insurance, and maintenance by - law:

CCI Review 2021/2022 —September 2021 - 12

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