Co-ownership insurance · Public order rules
A defective water heater, water infiltrating neighbouring units, an insurance deductible so high that the syndicate's insurer cannot be involved. A syndicate seeking compensation from the co-owner. Years of court proceedings.
This is an example of a scenario drawn from recent case law that, unfortunately, occurs far too often — and that could, in many cases, have found a far less costly resolution through mediation.
THE CO-OWNERSHIP INSURANCE REGIME: UNDERSTANDING THE RULES
In divided co-ownership, the legislator has established a centralized, public order insurance system. This means its rules cannot be set aside by a declaration of co-ownership or a private contract: any contrary clause is deemed unwritten (art. 1074.2 para. 2 C.C.Q.).
| Article | Rule |
| Art. 1073 C.C.Q. | The syndicate has an insurable interest in the entire building — both common portions and standard private portions. It must take out insurance covering the whole building, financed through common charges. |
| Art. 1074.1 C.C.Q. | If the syndicate does not claim from its insurer (e.g., the deductible is too high), it loses all recourse against the co-owner — unless fault can be proven. |
| Art. 1074.2 C.C.Q. (public order) | Costs incurred by the syndicate to repair an uninsured claim may only be recovered from co-owners in two situations: through common charges, or through damages if the co-owner is at fault or under certain applicable rules of extracontractual civil liability (e.g., as custodian of the property). |
| Art. 1074.3 C.C.Q. | The syndicate's insurance is always first in line, even if the co-owner holds their own insurance covering the same risks and/or property. |
| Art. 1064.1 C.C.Q. | Every co-owner must maintain civil liability insurance in the minimum amount set by government regulation. |
The deductible: the most common friction point. When the claim amount is below the deductible, the syndicate cannot claim from its insurer. It must absorb the costs itself, then decide whether to seek recovery from the co-owner concerned. This is where the vast majority of disputes between syndicates and co-owners arise.
CO-OWNER LIABILITY: WHO PAYS WHAT?
Where the syndicate cannot rely on its insurance, it may still pursue the co-owner — but only in specific cases.
For example, article 1465 C.C.Q. creates a presumption of fault against the custodian of property that causes an autonomous loss. In co-ownership, the standard of vigilance is particularly high: the proximity of the units means that the negligence of a single co-owner can affect the entire building.
« For the financial burden of a claim originating in a co-owner’s private portion to fall on the collective — rather than on their own liability insurance — the co-owner must demonstrate that they actively took measures to try to prevent the claim from occurring. »
— Syndicat des copropriétaires du Condominium Club Marin II c. Andrade, 2026 QCCQ 3004, par. 43 [translated from French]
A co-owner’s negligence can, in certain situations, expose them to liability for harm caused to the rest of the building and to other co-owners’ property. In a condo setting, a heightened duty of vigilance is the expected standard for peaceful cohabitation.
What the declaration of co-ownership may add. The declaration may specify particular obligations (e.g., mandatory water heater replacement every 10 years) without derogating from the public order rules of art. 1074.2 C.C.Q. Such preventive obligations significantly reduce the frequency of claims.
WHY MEDIATION IS THE PREFERRED PATH
A dispute between a syndicate and a co-owner following a claim is ideal ground for mediation. Why?
Because the parties are bound together long-term. Unlike a dispute between strangers, the syndicate and the co-owner must continue to coexist after the settlement. A court judgment often leaves lingering tensions; a mediated agreement is chosen by both parties and preserves the relationship.
Because the facts are often ambiguous. The exact cause of a claim often remains uncertain. Mediation allows the parties, with expert assistance if needed, to agree on a shared account of the facts and an equitable allocation of costs, without having to prove fault before a judge.
Because legal costs accumulate quickly. Court proceedings can rapidly generate exorbitant costs for both parties. Mediation avoids spending thousands of dollars in legal and court fees, and leads to a faster resolution at a lower cost.
EXAMPLES OF DISPUTES WHERE MEDIATION IS WORTHWHILE
Water damage below the insurance deductible
The syndicate's deductible is $100,000 and the damages amount to $45,000. The syndicate cannot claim from its insurer. Mediation allows the parties to agree on a cost-sharing arrangement and a repayment schedule, without court proceedings.
Disputed allocation of repair costs
Following a claim, the syndicate and a co-owner agree on liability but dispute each party's share and the choice of contractors. A specialized mediator helps the parties agree on a common estimate and a clear allocation.
Dispute over improvements versus the standard unit
The syndicate's insurer refuses to cover part of the damages, characterizing them as "improvements." Mediation between the syndicate and the co-owner clarifies what falls under the standard unit and what constitutes a personal improvement.
Claim partially caused by the syndicate's work
A claim occurs during work carried out by workers mandated by the syndicate. The exact cause is disputed. Mediation allows the parties to involve a technical expert and reach an equitable settlement.
HOW DOES THE MEDIATION PROCESS WORK?
Co-ownership mediation generally follows the rules of the Code of Civil Procedure. Here are the key steps:
- Agreement to mediate or arbitration clause in the declaration of co-ownership. The parties voluntarily agree to submit their dispute to a mediator. This may be provided for in the declaration of co-ownership or decided after the claim arises. (art. 608 C.C.P.)
- Choice of mediator. An accredited mediator, ideally specializing in co-ownership law and insurance law, is chosen by mutual agreement through the IMAQ or directly.
- Presentation of positions. The mediator helps distinguish each party’s positions from their underlying interests, separately in caucus. They identify points of agreement and disagreement with the aim of facilitating mutually satisfactory solutions and compromises.
- Exploration and negotiation. The parties propose options, evaluate them together, and make compromises. The mediator reframes, reformulates, and defuses tensions. They do not propose solutions themselves, but may ask strategic questions.
- Written agreement. If an agreement is reached, it is put in writing and is binding between the parties, and may be homologated by the court.
Absolute confidentiality. Everything said in mediation is confidential. If mediation fails, the elements discussed cannot be used in court. This protection encourages the parties to speak freely and promotes durable agreements.
MEDIATION OR COURT: THE RIGHT CHOICE
| Mediation | Court | |
| Cost | Several hundred to a few thousand dollars | $10,000 to $50,000+ |
| Duration | A few days to a few weeks | 1 to 3 years on average |
| Decision | Chosen jointly by the parties | Imposed by a judge |
| Confidentiality | Absolute (art. 607 C.C.P.) | Public hearing |
| Relationship preserved | Yes — the parties cohabit | Rarely |
| Applicability | As soon as the claim is discovered | After exhausting other remedies |
Where to start?
Is your syndicate facing a claim not covered by insurance, or are you a co-owner being pursued by your syndicate? Consult your lawyer or contact us at Fiset Legal. Our accredited mediation and arbitration lawyers, specializing in co-ownership law, can help you find a fast and equitable resolution before Court becomes unavoidable.
In co-ownership, a poorly managed claim costs far more than mediation.
