Syndicates of co-ownership: Three rules that always applySyndicates of co-ownership: Three rules that always apply de copropriété : trois règles applicables en tout temps

​​​Every syndicate of co-ownership is unique and thus, each situation requires its own specific, tailor-made evaluation of insurance needs. However, there are also compliance principles that are invariable and remain applicable at all times. Here are three such principles.

Respect One’s Limits and Means

Before accepting a mandate, a damage insurance representative must take into account the limits of his knowledge and abilities andthe means available to him. He must not undertake or continue a mandate for which he does not have the necessary skills, without obtaining the proper assistance. So stipulate section 17 of the Code of ethics of damage insurance representatives, and section 28 of the Code of ethics of claims adjusters.

This obligation is all the more important, since managing the risk associated with syndicates of co-ownership requires special expertise, in particular, in order to properly respond to the client’s insurance needs, or to assess the losses suffered. Let’s take the example of a fourplex that has been converted into condos versus a newly built apartment building with indoor parking and a gym requiring on-site staff. Although they are both condominiums, their needs are very different. For insurance purposes, the representative must ask questions regarding the specific risks to be foreseen in order to offer the appropriate coverage. An in-depth knowledge of the field is thus essential.

A damage insurance representative can seek help from a more experienced colleague or discuss the case with the insurer’s underwriters. However, it is important to be transparent and inform the client of such consultations.

If he cannot obtain this support, the representative must refuse the mandate or cease working on it, if need be. He may subsequently decide to improve his knowledge and develop his skills in order to better understand such mandates and to successfully carry them out in future. To this end, the ChAD has created a list of accredited training activities (in French only).

Act as a Conscientious Advisor

This second rule goes to the very heart of the damage insurance agent’s or broker’s work. In order to provide the client with advice tailored to his specific needs, the representative must first establish the most accurate picture of the situation possible. To offer the syndicate of co-ownership appropriate coverage, the professional must gather extensive documentation and information. However, clients sometimes do not understand why the professional is making such requests and even less why certain types of coverage are recommended.

Sometimes, it is advisable to remind the client of certain legal implications. For instance, the Civil Code of Québec stipulates that the syndicate of co-ownership must purchase insurance equal to the replacement cost of the building. The representative might therefore suggest a professional evaluation in order to establish a more accurate insurable value. Does the building comply with current standards? The representative might advise the syndicate of co-ownership to have the building inspected to get all the facts. The syndicate of co-ownership might update its maintenance records and make sure it has a sufficient contingency fund. These are just some of the issues that must be taken into consideration when underwriting this kind of risk. If the condominium employs staff, the damage insurance agent or broker can remind the syndicate of its obligations as an employer (salaries, holidays and leaves, payroll deductions) and suggest that it draw up a full list.

To help the syndicate make informed decisions, the representative can explain that the number of commercial units and their use affect the risks to which it is exposed, for example, when premises are open to the public or rented to a third party. Along the same lines, although the syndicate of co-ownership may understand how maintenance or supply contracts impact the budget, it may not realize that if these contracts are not honoured, it could be sued for civil liability. The representative must therefore explain to the syndicate that proper coverage also includes taking “major” contracts into account.

In all cases, the syndicate of co-ownership and the damage insurance representative must have a frank, informed discussion together to ensure that the representative fully understands the client’s needs and that the client is aware of the importance of sound management practices for the condominium.

Deal with the Right People

Professionals must be sure to avoid any third-party intervention in the file, pursuant to section 37(3) of the Code of ethics of damage insurance representatives and section 58(3) of the Code of ethics of claims adjusters.

Often, your resource-person will be the president of the syndicate, who will be able to tell you who to consult. However, in order to ensure that you actually speak to the right people, it is important to ask for the names and contact information of the members of the board of directors, and, if applicable, the property manager, and those who have signing authority for the bank accounts. You must also identify the individuals authorized to act on behalf of the condominium with respect to insurance needs (and claims, if need be). In the event of a claim, the other co-owners will also have their say since they have an insurable interest.

Furthermore, it is advisable to keep the list of authorized individuals and their contact information up to date. A former board member who knows the condominium inside out could accurately answer questions—without being authorized to do so.

A New Tool

In order to better understand the needs of syndicates of co-ownership, the ChAD has created a non-exhaustive list of documents and information that representatives should ask for, ranging from the indispensable to the “nice to have”. Indeed, some of these documents could be important in the case of more complex condominiums. Download this list​ from the website at and click on The Advisory Role (in French only).

Properly Protected Professionals

As professionals, representatives must fulfill a number of obligations in order to ensure that their clients are properly covered. Some of these obligations are also designed to protect the professionals themselves. For example, keeping proper notes in the client-record and keeping the records well organized are not just ethical obligations—these practices also protect representatives, should the need arise. Furthermore, if the representative acts as a risk manager for a syndicate of co-ownership, he should contact his professional liability insurer to make sure that the professional liability insurance he holds as a representative is sufficient to also cover his activities as a risk manager. If not, changes to his coverage should be made. This will ensure that any action he takes is covered by his professional liability insurance.

7/4/2017 8:15:31 PM