Insurance Requirements for Condominium Corporations
Under the Condominium Property Regulation and Condominium Property Act, condominium corporations are required to maintain specific types of insurance to protect the corporation, owners, and common property.
WHAT YOU'LL LEARN
Insurance Requirements for Condominium Corporations
The Role of the Condominium Manager in Insurance Compliance
Managing Major Repair Projects
Legislative Requirements for Insurance
Under the Condominium Property Regulation and Condominium Property Act, condominium corporations are required to maintain specific types of insurance to protect the corporation, owners, and common property.
Types of Insurance Required
Insurance for Common Property and Assets:
A corporation shall place and maintain insurance on the units and common property against loss resulting from destruction or damage caused by fire and other perils as specified in the regulations.
Liability Insurance:
The corporation must obtain and maintain liability insurance to cover the corporation’s liability to others for bodily injury or property damage.
Directors and Officers Insurance:
The corporation may obtain insurance to protect the board members against liability for their actions carried out in good faith while performing their duties.
The Role of the Condominium Manager in Insurance Compliance
Condominium managers play a key role in ensuring that the corporation complies with insurance requirements. Their responsibilities include:
Ensuring Adequate Coverage:
Reviewing the corporation’s insurance policies annually to ensure compliance with the Condominium Property Regulation.
The insurance must be adequate to replace or repair the property as per the terms of the regulation.
Coordinating Claims:
Assisting the board and owners with the claims process, including gathering documentation and liaising with the insurance provider.
Educating Owners:
Informing owners of their responsibilities regarding unit-specific insurance policies (e.g., personal property insurance).
Common Errors and How to Avoid Them
Error 1: Insufficient Insurance Coverage
Example: A corporation fails to update its insurance policy after completing a major renovation.
Solution: Ensure all improvements to common property are reported to the insurance provider.
Error 2: Failure to Communicate Insurance Gaps
Example: Owners are unaware that the corporation’s policy does not cover unit contents.
Solution: Provide clear documentation to owners on the limits of the corporation’s insurance policy and their personal responsibilities.
Managing Major Repair Projects
The Role of the Condominium Manager
Condominium managers are often responsible for overseeing major repair projects to ensure they are completed on time, within budget, and in compliance with the corporation’s requirements.
Key Responsibilities Include:
Project Planning and Budgeting:
Assist the board in creating a project plan and budget.
The corporation must prepare and approve a budget for any major repair project involving common property.
Hiring and Supervising Contractors:
Solicit bids and recommend qualified contractors to the board.
Ensure contracts include clear terms regarding scope, timelines, and payment schedules.
Monitoring Progress:
Conduct regular site visits and update the board on the project’s status.
Ensuring Compliance with the Reserve Fund Plan:
Verify that the repair is funded appropriately from the reserve fund.
The corporation shall only use reserve fund monies for major repairs or replacement of common property.
Resolving Contractor Disputes
Common Causes of Disputes
Scope of Work Disagreements:
Contractors claim additional work was required but not included in the original contract.
Delays:
Contractors fail to meet deadlines, causing inconvenience to owners.
Payment Issues:
Disputes over unpaid invoices or withheld payments due to unsatisfactory work.
Steps to Resolve Contractor Disputes
Review the Contract:
Ensure the contract outlines clear terms for dispute resolution.
A written agreement with contractors must specify timelines, scope, and payment schedules.
Communicate with Both Parties:
Act as a neutral mediator to clarify misunderstandings.
Document Everything:
Keep detailed records of correspondence, site visits, and changes to the project scope.
Engage Legal Professionals if Necessary:
If the dispute cannot be resolved amicably, escalate the matter as per the dispute resolution clause in the contract.
Interactive Activity
Scenario:
A contractor working on a roof replacement project claims additional costs due to unforeseen structural issues. The board disputes the claim, citing a fixed-price contract.
Task:
Analyze the situation based on the Condominium Property Regulation.
Recommend steps for the condominium manager to resolve the dispute while protecting the corporation’s interests.
