Part 17 published on 01/02/07
Condominium corporation obligation to arrange insurance does not render corporation responsible for deductible
Damage was caused to two units in the condominium because of water escape from a frozen pipe. The pipe had frozen because the tenants in one of the units had negligently turned the thermostat down to “zero”. The corporation had arranged insurance but the amount of the damage was below the insurance deductible of $25,000.
The Court said that the condominium corporation had properly fulfilled its insurance responsibilities. The deductible was not unreasonable. The question was: Who was responsible for the deductible? The Court said: “A determination must flow from the by-laws”. In this case, the by-laws were silent as to responsibility for the deductible. However, under the terms of the by-laws, the owners were responsible for repairs to the units. Therefore, the owners were responsible for any required repairs falling within the deductible. The Court said that the condominium corporation is not an “insurer for the deductible”, unless the by-laws so provide.