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The RGCQ's stance on article 1074.2

La position du RGCQ envers l'article 1074.2

Dear members,



As the RGCQ was questioned on article 1074.2 of the Civil Code of Quebec, please find our position on the subject below.



The crux of the matter is that the current wording of Section 1074.2 is open to interpretation. Insurers often read it restrictively and, when disputes come to court, judges complain of a lack of clarity. In the middle, many unions cannot afford to hire a lawyer or deal with a manager who will enforce their rights with insurance companies. The priority of the RGCQ is therefore to offer a lasting, practical and clear solution to this problem.



From this perspective, we do not believe that a simple clarification from the legislator or an effort to communicate with insurers is enough. The effect of these steps would be temporary at best and the unions and co-owners would be subject to the goodwill of their insurer.



We therefore propose the following solution: if a loss comes from a private portion, then it is the responsibility of the co-owner(s) of this private portion to reimburse the deductible or the amounts lower than the deductible paid by the syndicate to repair it, whether there is fault or negligence.



This choice has several advantages. First of all, it is closer to the spirit of the PL141. Indeed, it is consistent with the new obligation for each co-owner to hold liability insurance. In co-ownership, this insurance is almost only used to reimburse the deductible of the syndicate. The insurers have accepted the subscriptions of some 350,000 co-owners in Quebec without any problem, but refuse to compensate them accordingly.



Then, it would settle the issue of claims caused by tenants, which are a thorn in the side of condominiums. At present, it is even more difficult for syndicates to obtain reimbursement of the deductible by the co-owner's insurance when the latter rents out his unit. While renting is becoming more and more popular, our solution makes it possible to resolve this major flaw in the application of this article.



Moreover, and for once, the burden does not fall on the syndicate's insurers, but on those of the co-owner. Liability insurance is compulsory coverage, inexpensive and for which there is a lot of offer on the market. Even if the modification that we are proposing would increase its cost, this increase seems to us more justified and sustainable than the increases that the unions have been experiencing for several years.



Moreover, this system would greatly simplify claims and limit the administrative burden associated with each claim, for the syndicate, the co-owners and the insurers. This would generate savings for all those involved in the management of claims and compensation.



To conclude, it should be noted that this is the formula that was chosen in France, where it has proven itself. The condominium stock has over 8 million units there and many buildings are old. If this solution is suitable in a more difficult context than in Quebec, we are convinced that it can be implemented without major problems here.



Cordially,



Regroupement des gestionnaires et copropriétaires du Québec