Getting to know Quebec’s Bill 141

What is Bill 141?

For a long time, the laws and rules governing condominiums have been a bit of a free-for-all in Quebec. In fact, rules around co-ownership in Quebec have only been in force over the last 50 years. In recent times, the condo market has enjoyed a boom in the province.

Bill 141 is designed to formalize the rules around co-ownership and close gaps in the regulation of this kind of housing.

The first condominium law in Quebec, Bill LQ1969c.76, was passed in 1969. Since then, it has only been reformed once, back in 1994. On June 13^th, 2018, Bill 141 was adopted to amend the Civil Code of Quebec regarding divided co-ownership insurance. Since then, different parts of the law have come into force, in 2020, 2021, and 2022.

In this article, we will take a look at the most important points of the law and how it affects your condo insurance.

What’s in the law?

Condo reconstruction cost, certified appraisal, and self-insurance fund

As of April 15^th, 2021, syndicates must take out insurance to cover the reconstruction cost of the building in the event of a major loss. Enshrined in section 1073 of the Quebec Civil Code, this regulation is designed to prevent co-owners from having to pay for damages if their syndicate’s contingency fund is insufficient.

From now on, syndicates must ensure that they have enough funds on hand to cover reconstruction costs. But how do they determine what that cost is? This is also covered by the new law: at least every five years, the syndicate must obtain an appraisal of the building: this appraisal must be performed by a certified member of the Ordre des évaluateurs agréés du Québec (OEAQ), which is the Quebec provincial body for certified appraisers.

As of April 15^th, 2022, the syndicate must also maintain a self-insurance fund to cover the deductible in the event of a claim. This is separate from the contingency fund that is earmarked for maintenance work and operations costs. The amount of the self-insurance fund must be equal to the highest deductible among all the insurance coverages taken out by the syndicate. Perils such as earthquakes and floods are excluded.

If the syndicate needs to use this fund, it has one to two years to replenish it depending on the amount withdrawn. If less than half of the fund is withdrawn, the syndicate has one year to replenish it. If more than half is withdrawn, the syndicate has two years instead. Co-owners initially contribute once to the self-insurance fund, but in the event of a claim, they may have to make an additional contribution to help the syndicate restock the fund.

Description of private portions

Under Bill 141, the syndicate must provide an accurate description of the private portions of the building. A private portion is a condominium unit in the building belonging to the co-owner. It includes the walls, the floors, and the ceiling of the unit.

The description, which must be included in the registry of co-ownership, is designed to help identify any improvements to the unit made by the co-owner. This facilitates the settlement of insurance claims while reducing the possibility of litigation, as the description specifies what is covered by the syndicate’s and the co-owner’s insurance.

Risks covered

The law also lists the perils covered by the syndicate’s insurance contract. By default, the syndicate’s insurance will cover all the perils listed below, unless they are specifically excluded. As of April 15^th, 2021, the syndicate’s insurance policy must stipulate any excluded coverages.

• Theft
• Fire
• Lightning
• Storms
• Hail
• Explosion
• Leaks and overflows from sanitary systems and appliances connected to water distribution conduits inside the building
• Strike
• Rioting or public commotion
• Aircraft or vehicle impact
• Acts of vandalism or malevolence

Compulsory liability insurance for co-owners

As of October 15^th, 2020, co-owners must take out a civil liability insurance of a minimum of $1 million if the building has fewer than 13 fractions that are used or can be used as a housing unit or for operating a business. The minimum amount is $2 million if the building is comprised of 13 or more units. This does not include fractions that are used for parking or storage.

Compulsory third-party liability insurance for the syndicate

Under the new law, the people who are responsible for managing the building must also hold third-party civil liability insurance. This includes the president and secretary of the co-owners meeting, and the manager and members of the board, who are generally not directors by trade. This measure protects co-owners who are involved in the running of their building in the event of a major error.

Commonly asked questions

I live in an undivided co-ownership. Does the new law apply to me?

No. Bill 141 only applies to divided co-ownership.

What if the syndicate had an appraisal of the building’s reconstruction cost done before April 15^th, 2021? Is that appraisal still valid?

As long as the syndicate had an appraisal of the building done by a certified member of the OEAQ in the four years preceding April 15^th 2020, the appraisal is valid. However, they will need to have a new evaluation done five years after that date. For example, if the appraisal was made on June 2^nd, 2019, a new appraisal would have to be done no later than June 2^nd, 2024.

I upgraded my condo to hardwood flooring. In the event of a covered loss, would the syndicate’s insurance reimburse me for damage to my flooring under the new law?

Under Bill 141, the syndicate must provide a detailed description of the private portions of the building. However, the syndicate’s insurance would only cover the value of the flooring described for a standard unit, or the value of the original flooring, and not the value of any upgrades. You would need to take out condo insurance that covers condominium improvements for this loss to be covered.

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