In our last newsletter, we wrote that the government had “grandfathered” insurance deductible recovery by-laws in the draft regulations that were recently released. We recommended that condominium corporations enact a deductible recovery by-law as soon as possible, so it will be in place when these regulations come into force.

We have looked into this issue further and here are three things you should know:

  1. It does not appear that the first set of amendments under the Condominium Act and the accompanying regulations will be effective in July 2017. It is looking like the earliest it will happen is September 2017.
  2. The amendments to the Condominium Act provide that an insurance deductible recovery provision must be contained within a declaration. Without grandfathering, the by-law provisions will no longer be operative. When we saw the draft regulations, we believed that an insurance deductible recovery by-law, if put in place before the amendments and regulations came into effect, would be grandfathered permanently. It appears that this may not be the case.
  3. We believe that when the section in the Condominium Act which requires the inclusion of an insurance deductible recovery provision in the Declaration is proclaimed, the “grandfathering” provision currently in the regulations may be repealed or modified. By-laws passed prior to that point would then become invalid. We do not know how the government will deal with this issue.

We have strongly recommended to the government that it not do away with grandfathering existing insurance deductible recovery by-laws and requiring that they be enacted by amendment to a declaration. We have suggested to the Ministry staff that, rather than eliminate the by-law grandfathering, they consider modifications that would allow deductible recovery where the damage originates from a unit regardless of cause, but perhaps not where the damage flows from the common elements.