Insurance · Ontario condominiums

Condo water damage in Ontario: who pays, what the standard unit covers, and when the deductible is yours

In an Ontario condominium, the question of who pays for a leak is answered by a statute before anyone opens an insurance policy. The Condominium Act, 1998 tells the corporation what it must insure, draws a line between the “standard unit” and an owner’s improvements, and decides when the corporation’s deductible lands on one owner’s common expenses instead of everyone’s.

This page sets out those sections in the Act’s own words, with the Condominium Authority of Ontario’s explanations and what the Insurance Bureau of Canada says the two policies — the corporation’s and yours — each cover. It is Ontario law; British Columbia’s strata rules, which differ in ways that matter, are on their own page.

The words in the declaration and the policy

What the corporation must insure

Water escape is on the statutory list, so a burst pipe or an overflowing appliance is a peril the corporation’s own policy must respond to, for the units and the common elements. What that policy pays for is the building as the standard unit describes it — which is where the next question starts.

The standard unit, and why it decides the bill

This is the line most condo water claims turn on. If the standard unit for your class of unit specifies builder-grade carpet and you installed engineered hardwood, the corporation’s policy rebuilds carpet; the difference is an improvement, and it is yours to insure. The same goes for a renovated kitchen, upgraded bathroom fixtures, or a finished den the original plans did not have.

The practical step is to get the standard unit description before the leak: a by-law under s. 56(1)(h) if the board has passed one, otherwise the schedule the developer delivered to the board. Compare it with what is actually in the unit, and set your own policy’s improvements limit from the difference.

When the deductible becomes yours

Read the default carefully. The chargeback applies to damage to the owner’s unit, caused by an act or omission of the owner, a tenant or someone living there with the owner’s permission or knowledge. The amount is capped at the lesser of the repair cost and the deductible. Otherwise, s. 105(1) makes the deductible a common expense that every owner shares.

This is where two buildings on the same street can differ completely. One corporation relies on the Act’s default; its neighbour has passed a deductible by-law that charges the unit where an accidental leak started, fault or no fault. The only way to know which you live in is to read the by-law — and the periodic information certificate, which has to state the number.

Who repairs, and who insures

The Act separates repairing from insuring and maintaining. Section 89(1) puts repair of the units and common elements after damage on the corporation, but s. 89(2) excludes improvements, measured against the same standard unit. Section 90 makes each owner responsible for maintaining their unit, and the corporation the common elements. Section 91 lets the declaration — not a by-law — move some of those duties around, including making owners repair their own units after damage. Where it does and an owner does not act within a reasonable time, s. 92 lets the corporation do the work and add the cost to that owner’s common expenses.

The sections, in the Act’s own words

Pipes inside the walls: two questions, in order

“Who is responsible for the pipe in my wall?” is really two questions, and the Act answers them separately.

1. Is the pipe part of your unit or a common element? That is set by your corporation’s declaration and description, not by the Act in general terms. Risers serving several units and the pipe inside your kitchen wall can sit on different sides of the line. Ask management for the declaration, the description and the standard unit by-law or schedule.
2. Is this maintenance or damage? Section 90(2) draws the line: maintenance includes repairing normal wear and tear; repair after damage is separate. A worn fitting that weeps is maintenance, owed by whoever maintains that pipe. The ceiling, flooring and the unit below it soaks are damage, which by default the corporation repairs under s. 89 — except improvements, and unless the declaration moved that duty to owners under s. 91.

Then the money. Who repairs is not the same as who ends up paying: the corporation’s insurance deductible can be added to your common expenses under s. 105 if your act or omission caused the damage, or wider if a by-law says so. That is the section most Ontario condo leak disputes actually turn on.

The order when water comes through the ceiling

1. Tell management immediately. The CAO notes the corporation can enter units without notice in an emergency such as a water leak — which is how the source upstairs gets shut off.
2. Photograph before anything is moved, in both units if you can.
3. Call your own insurer. Your contents, improvements and any deductible chargeback are on your policy, not the corporation’s.
4. Ask where the water came from, in writing. Whose act or omission caused it is what s. 105(2) turns on, and it is a factual finding.
5. Ask for the deductible by-law and the standard unit description before accepting a chargeback.

Nothing in the Act makes the owner upstairs directly liable to the owner downstairs; s. 105(2) concerns damage to the owner’s own unit. That is this site’s reading of the text, not legal advice, and liability between owners is a question for your insurer and, if needed, a lawyer.

Sewer backup in a condo: who is responsible

A sewer backup into a condo unit runs through the same Act as a leak from the unit above, but one step in it is different. The corporation’s duty to insure is a duty to insure against major perils (s. 99, quoted above). Section 99(2) lists them: fire, lightning, smoke, windstorm, hail, explosion, water escape, strikes, riots or civil commotion, impact by aircraft or vehicles, and vandalism or malicious acts.

Water escape is on that list. A backup from the sewer is not named on it. So whether the corporation’s policy responds to a sewer backup depends on what the corporation actually bought and on any other perils its declaration or by-laws specify — the Act sets the minimum, and the policy and the documents decide the rest. The certificate of insurance and the periodic information certificate are the documents to ask for before it happens.

Where the corporation’s policy does respond, the deductible follows the general rule. Section 105(1) makes the deductible portion a common expense shared by all owners; s. 105(2) moves the lesser of the repair cost and the deductible to one unit only where an act or omission of the owner, a tenant or someone living there caused the damage; and a by-law under s. 105(3) can widen that, including, the CAO says, to accidents where no one is at fault. A backup caused by what went down one unit’s drains is the case where the chargeback question arises.

Under s. 89, quoted above, the corporation repairs units and common elements after damage, but not improvements beyond the standard unit — a finished floor or cabinetry that the standard unit does not include is the owner’s to repair and insure. That is where the owner’s own policy comes in, and the endorsement that matters is the one most people do not have by default:

For a unit owner the practical order is: the declaration and description for where the pipe and the unit boundary sit; the corporation’s certificate of insurance for whether sewer backup is covered and what the deductible is; the deductible by-law for when that deductible can be charged to a unit; and your own policy for improvements, contents and the sewer backup endorsement. What a backup involves in general, and when a city is responsible, is on sewer backup.

What your own policy should cover

IBC describes three pieces of a unit owner’s policy that matter here: cover for upgrades and improvements, up to a stated limit; contingency cover for when the corporation’s insurance is insufficient; and loss assessment cover for your share of losses above the corporation’s limit. Because s. 105(4) makes a chargeback an insurable interest of the owner, it is also something a policy can be written to cover — ask whether yours does, and to what amount, against the figure in your periodic information certificate.

And the two water endorsements that apply to houses apply to units too: a sewer backup into a ground-floor unit, or water arriving from outside, is decided by the policies’ wording on those perils. See sewer backup and overland water.

Questions people actually ask

Where to read next

• BC strata: the deductible rules differ
• Alberta condos: absolute liability
• Renting a condo: tenants and landlords
• Twelve water situations compared
• Appliance leaks, the usual cause
• When a claim is denied