Insurance arbitration in co-ownership: resolving disputes between the syndicate and the co-owner

Articles 1073, 1074.1, 1074.2 C.C.Q. · Art. 2638 C.C.Q. · Art. 622 C.C.P.

In divided co-ownership, claims — water damage, fires, equipment failures — frequently generate disputes between the syndicate and one or more co-owners. These disputes typically concern liability for the claim, the allocation of repair costs, or the application of the public order insurance rules under articles 1073 to 1074.3 C.C.Q. Where the syndicate’s deductible is high and the damages do not exceed it, the syndicate must absorb the costs and decide whether to seek recourse against the co-owner, if the latter is at fault.

Arbitration is a private dispute resolution process in which the parties entrust their dispute to a neutral third party — the arbitrator — whose decision is final and binding. Unlike mediation, where the goal is to reach a mutual agreement, arbitration resembles a private trial: the arbitrator hears both parties, examines the evidence, and renders a decision — called an arbitral award — that is binding on all.

WHAT DISPUTES CAN BE SUBMITTED TO ARBITRATION?

Disputes most commonly submitted to arbitration between a syndicate and a co-owner include:

• Disagreement over liability for a claim: the syndicate attributes the cause of the claim to the co-owner (e.g., a defective water heater, negligence in the private portion), but the co-owner disputes this.
• Allocation of repair costs: where the deductible exceeds the damages, the syndicate bears the repairs and may seek to recover costs from the at-fault co-owner under art. 1074.2 C.C.Q.
• Classification of improvements vs. standard unit: the insurer refuses to cover certain damages by characterizing them as improvements. An arbitrator can resolve this classification.
• Interpretation of the declaration of co-ownership: clauses relating to maintenance or equipment replacement obligations may be disputed.
• Shared liability during syndicate work: a claim arises during work carried out by workers mandated by the syndicate — the exact cause is disputed.

Reminder of public order rules. Under art. 1074.2 para. 2 C.C.Q., any clause in the declaration of co-ownership that derogates from the liability regime is deemed unwritten. The syndicate may only recover costs from the co-owner if fault or the autonomous act of property under their custody is demonstrated.

WHEN IS ARBITRATION AVAILABLE?

Arbitration may be available in several ways:

• Arbitration clause in the declaration of co-ownership: some declarations provide that all disputes must be submitted to arbitration before any court action (art. 2638 C.C.Q.). If such a clause exists, the court must refer the dispute to arbitration (art. 622 C.C.P.).
• Arbitration agreement after the claim: where no pre-existing clause exists, the syndicate and the co-owner may jointly agree to submit their dispute to arbitration.
• Insurers consent or are required to participate: insurers are generally not bound by clauses in declarations of co-ownership unless the insured specifically brings them to the insurer’s attention.

WHO IS THE ARBITRATOR?

The parties themselves choose, by mutual agreement, the arbitrator who will decide their dispute (art. 624 C.C.P.). If needed, more than one may be appointed: each party nominates one, and those arbitrators jointly designate a third. If the parties cannot agree, the court may take any necessary measure to ensure the appointment (art. 625 para. 1 C.C.P.).

In disputes between a syndicate and a co-owner, the ideal arbitrator is a lawyer specializing in co-ownership law and insurance law, capable of interpreting the declaration of co-ownership, insurance policies, and the public order rules of the C.C.Q. The parties may select one through the IMAQ.

Once chosen, the arbitrator must be impartial and independent, in accordance with art. 23 of the Charter of Human Rights and Freedoms. Their expertise in divided co-ownership is a decisive advantage over a generalist judge.

HOW DOES ARBITRATION WORK?

Here are the five key steps of an arbitration between a syndicate and a co-owner:

1. Notification and constitution of the arbitral tribunal: The party wishing to proceed with arbitration notifies the other in writing. This step officially triggers the procedure. The parties agree on the number of arbitrators and their names, or follow the procedure set out in the declaration of co-ownership.
2. Hearing and presentation of evidence: The proceedings take place at an oral hearing, unless the parties agree otherwise (art. 633 para. 1 C.C.P.). The arbitrator may administer oaths, appoint experts, and require disclosure of any relevant document: insurance policies, expert reports, minutes, photographs of the claim.
3. Deliberation: After the hearing, the arbitrator takes the matter under advisement. The expert evidence is assessed in light of the public order rules of the C.C.Q., the terms of the declaration of co-ownership, and the applicable insurance policies.
4. Arbitral award: The award is rendered in writing. It is final and binding on both parties. Upon request, it may be homologated by the court and acquire the same executory force as a judgment (art. 645 para. 1 C.C.P.).
5. Enforcement: Once homologated, the award may be enforced by seizure if not complied with. In practice, the vast majority of arbitral awards are complied with voluntarily.

WHAT IS THE ARBITRAL AWARD?

The arbitral award is the written decision rendered by the arbitrator. It is equivalent to a judgment of the Superior Court. It binds the parties upon notification and cannot simply be ignored by the syndicate or the co-owner.

To be enforceable, the award must be homologated by the court at the request of a party (art. 645 para. 1 C.C.P.). Homologation is generally granted as of right, unless the award violates public order or a ground for annulment under art. 646 C.C.P. is established.

In practice, applications to annul arbitral awards are extremely rare and seldom granted. This is why it is essential to be well prepared before entering arbitration — the decision is almost always final.

ADVANTAGES OF ARBITRATION IN CO-OWNERSHIP

• Speed. An arbitration file is typically resolved in a few months, compared to several years in court.
• Technical expertise. The arbitrator can be chosen specifically for their knowledge of divided co-ownership law and applicable insurance rules.
• Confidentiality. Arbitration takes place in private. The details of the dispute and the award are not made public — an important advantage in preserving trust within the co-ownership.
• Procedural flexibility. The parties choose the arbitrator, schedule, and applicable rules.
• Binding decision. Unlike mediation, arbitration guarantees a definitive outcome.

COURT OR ARBITRATION?

Criterion	Civil court	Arbitration
Decision	Imposed by a judge	By the arbitrator — final
Confidentiality	None — public hearing	Yes — in camera
Typical duration	1 to 5 years	A few months
Right of appeal	Yes	Very limited
Arbitrator expertise	Not guaranteed	Yes — specialized
Approximate cost	$10,000 to $100,000+	Moderate to high

WHAT TO KNOW BEFORE PROCEEDING

• Read your declaration of co-ownership. Verify whether it contains an arbitration clause. If so, arbitration is generally mandatory before any court action.
• Document everything. Keep all your exchanges: emails, letters, expert reports, minutes, photographs of the claim.
• Consult a specialized lawyer. The award is virtually irreversible — it is better to be well prepared.

Where to start?

Whether you are a syndicate manager or a co-owner facing a claim, Fiset Legal has a dedicated practice in co-ownership law and insurance law. Our accredited mediation and arbitration lawyers assess your file and guide you through to resolution.

In co-ownership disputes, being well supported means being better protected.