Canada: Insurance Deductible By-Laws Under The New Act – Will They Be Grandfathered?

Last Updated: April 11 2017
Article by David Thiel

This is one of a series of newsletters that the Condominium Law Group at Fogler, Rubinoff LLP will be providing to our condominium industry contacts as changes to the Condominium Act, 1998 are implemented. We endeavour to keep our contacts and clients up to date as developments occur.

Over the course of the past week approximately, there has been much discussion and several notices circulated in the condominium industry about the desirability to enact insurance deductible by-laws in advance of July 1, 2017 when certain changes in the Condominium Act, 1998 (the "Act") and its regulations may come into effect. In this communication, we will explain the current situation with insurance deductible bylaws, the anticipated changes to the Act in that regard, and how this relates to a possible advantage to enacting insurance deductible by-laws prior to July 1, 2017.

A. Current Act

Under the Act currently, a Corporation can chargeback to an owner up to the amount of the Corporation's deductible IF:

  1. An act or omission of the owner (or resident etc.) caused the damage AND
  2. The damage is to the owner's unit.

This is of limited benefit to a Corporation if, for example, there is a flood from a unit that damages units below.

However, the Act states that the Corporation can enact a by-law to EXTEND the circumstances above (an "Insurance Deductible By-law"). Usually, that means a by-law to allow for insurance deductible recovery from an owner with respect to damage to other units, and the common elements.

The most typical Insurance Deductible By-law in our experience (and the usual case from the original builder by-laws for new condominiums) has been a by-law extending the circumstances such that the Corporation can recover where an act or omission of an owner damages other units and the common elements ("Typical By-law"). Note that the caselaw confirms that a Corporation need not show negligence of an owner, just that an act or omission caused the damage.

Some condominiums have enacted Insurance Deductible By-laws that go even further. These by-laws for example make the owner responsible for any damage originating from the unit (except if caused by the Corporation) and in general for any damage to the owner's unit at all, however caused (a "Strict Liability By-law"). This is quite broad and to a large degree the purpose is to avoid any disputes about causation.

B. New Act

Under the proposed changes to the Act, (which are not yet in force and there are no firm details as to when it will be proclaimed into force either in whole or in part) (the "new Act"), the 'default' situation will be that a Corporation can recover up to the deductible amount from an owner where the owner's act or omission causes damage to any unit or to the common elements. In other words, the default situation will be the same as the Typical By-law.

This default situation can be amended under the new Act by a Corporation, but only with a Declaration amendment. This type of Declaration amendment will specifically require 90% of the owners to consent in writing. (Many other changes to a Declaration only require 80%).

The new Act does not mention grandfathering of existing Insurance Deductible By-laws.

C. Draft Regulations

Only limited draft regulations have been released to date, and those are subject to change. These draft regulations to date cover areas that do not directly affect insurance deductibles.

However, buried within some of those draft regulations under the Act concerning communications to owners, there is mention of Insurance Deductible by-laws enacted prior to some of the changes in the Act. It is possible (but by no means certain) that this could mean that Insurance Deductible By-laws may be grandfathered. Keep in mind that these draft regulations are not the regulations affecting insurance deductibles directly and such draft regulations have not been released.

D. Typical vs. Strict Liability By-laws

The Strict Liability By-law would make it easier for a Corporation to collect insurance deductibles from owners, and should help to avoid disputes. It is not easy to pass a by-law in many situations and owners may take some convincing to vote for a Strict Liability standard, making such by-laws a challenge to pass in many situations. Overall, a Strict Liability By-law is more favourable to a Corporation, at the expense of imposing more responsibility upon individual owners who may obtain insurance to cover the possibility of having to pay a Corporation deductible. Having it is helpful for condominiums, rather than to get into disputes about an 'act or omission'. For example, if a unit pipe bursts, there could be a dispute about whether the owner had caused the damage through an act or omission (an omission may be lack of maintenance).

E. Takeaways

This is not an easy issue. If we knew for certain that the new Act would grandfather insurance deductible bylaws, it may be worthwhile to enact assuming that the requisite level of support could be obtained from owners. Every condominium will be different in terms of whether it makes sense to take the risk and incur the cost and inconvenience of enacting a by-law on relatively-short notice.

There is a risk that such a by-law may not be valid once the applicable changes to the Act are finalized and come into force.

Enacting a Declaration amendment prior to July 1, 2017 carries similar considerations, with the benefit of having 'only' to obtain written consents of 80% owners as opposed to 90% after July 1, 2017. Note also that such an amendment must meet the requirements of the regulations, so there is no guarantee that such an amendment will be effective as we do not know what additional requirements (if any) would be found in the regulations in this regard.

Another option may be to wait for more clarity on the grandfathering issue leading up to July 1. This may leave less (or not enough) time to implement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

David Thiel
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.