Who Pays For Damage To Units?

Written by Shlomo Sharon | 28 August 2004

The Toronto Star − Condo Living Section
Condo Living sent the following question to Shlomo Sharon, President, Taft Forward Property Management Group

Question

I am inquiring about damage to other units caused by, for example, a toilet tank or a washer bursting in a top floor unit. I have been told that if damage was due to negligence by the unit owner, then the unit owner (or his insurance) pays for it, but if it’s not a result of the unit owner’s negligence, then the condominium corporation (or its insurance) is responsible.

Answer

This question deals with two aspects - insurance and the obligation to repair.

Insurance: First, determine whether the damage is covered under the condominium corporation’s insurance policy.

According to the Condominum Act, the condominium must insure both the units and the common elements. If the incident involves an insurable item which could include an overflowing toilet tank, then the corporation would have to find out what was damaged -- the unit and/or the common elements. Any improvements made by a unit owner or any personal belongings would not be covered by the condo corporation’s insurance policy.

Even if a unit owner caused the damage or was negligent, the corporation has to make an insurance claim to cover any damage to the units or common elements.

To determine if the damage was caused to the unit (covered) or to an improvement (not covered), the declaration and the bylaws need to be reviewed. Some Corporations have put into place a Standard Unit bylaw, which may define the "unit" as the "bare bones" and may not include items such as carpeting, hardwood flooring and appliances and fixtures. If that is the case, if a toilet tank overflows and damages the flooring in the unit below, it would constitute damage to an "improvement", which would not be covered by the corporation’s insurance policy.

The unit owner who suffered the damage, although innocent, would have to pay the cost or put the claim through his own insurer.