December 2024
The Stand Unit By-law helps condominium owners, directors, management and insurance providers know who is responsible for repairing damaged property covered under an insurance plan. For condominium corporations that have implemented this by-law, it ensures owners are equal beneficiaries of corporation insurance.
When a condo unit is sold, a Standard Unit By-law provides clarity for the new owner about what is covered under condominium corporation insurance.
This by-law makes clear what property within the boundaries of a unit are insured by the corporation, and clarifies what unit improvements owners are responsible to insure
This by-law makes clear what property within the boundaries of a unit are insured by the corporation, and clarifies what unit improvements owners are responsible to insure. The effect of a Standard Unit By-law is to reduce the insurable value for the corporation. Building residents and unit owners should ensure that items not covered by corporation insurance are included in their personal home or renter insurance coverage.
The Standard Unit By-law ensures all unit owners are treated fairly and equally in the event of a claim that triggers the corporation’s insurance policy. In general, it states that anything in the unit prior to its registration is insured by the corporation. Everything else is an improvement.
An owner spending $100,000 to upgrade flooring, appliances and other aspects of their home is expected to insure these improvements or betterments through their own insurance policy. Without a Standard Unit By-law, damage and payment of an insurance claim for this unit would in some way be paid through the condo fees of other owners.
For an insurance company, a Standard Unit By-law can speed up insurance payments on claims. It clearly defines what is covered under a condominium corporation insurance policy so that insurance companies don’t have to undertake an investigation for this purpose. Communities without a Standard Unit By-law can experience delays in claims settlements as insurance adjusters attempt to identify original builder specifications and place a value on losses.
