The insurance of the syndicate covers the common portions of the building as well as your private portion. In the event of a loss, it is not intended to compensate you for improvements made to your private portion. It is therefore your responsibility to ensure that these improvements are covered by individual insurance and at their proper value. For example, if renovations were done with materials of higher quality than the original ones, this value will increase. Your insurance policy must cover the improvements you have made yourself, as well as those made by previous co-owners.
What is an improvement?
"Improvement" means work that results in an additional value to your unit compared to the original condition of your unit. Repainting your apartment is not by itself an improvement. On the other hand, replacing the original floor covering (flooring) with one of higher quality to the original is, in all likelihood, an improvement to your private portion.
How to identify the improvements?
To identify the improvements made to your private portion, it is essential to refer to the description of the private portion provided by the syndicate of co-owners. This description, called the reference unit, must be sufficiently detailed to distinguish the improvements made by co-owners since the creation of the co-ownership (at the publication of the declaration of co-ownership), and not since you acquired the apartment.
In this regard, article 1070 of the Civil Code of Québec was amended in June 2018. It now includes a third paragraph stating that “ the syndicate keeps at the disposal of the co-owners a description of the private portions that is sufficiently precise to allow any improvements made by co-owners to be identified. The same description may be valid for two or more portions having the same characteristics”. This description must be recorded in the register of co-ownership so that co-owners can consult it upon request. The obligation for syndicates to establish this descriptive statement of the private portions came into force on December 13, 2018, for co-ownerships established from June 13, 2018. Those created before this date have been subject to this requirement since June 13, 2020.
If you have difficulty understanding this description, consulting the co-ownership register may be useful. There you will find additional information such as brochures, promotional leaflets issued by the developer at the time, or the information note specifying the nature of the original materials.
How to fix the value of the improvements?
If the improvement work in your private portion has been carried out by contractors, the sum of their invoices should allow you quickly to establish the value of the work. You will then have to determine the added value given to your apartment therefrom. On the other hand, if you purchased a unit already improved by the previous owners, going back in time to list all improvements and calculating their costs can be more difficult. Unless your vendor provides you with the necessary documentation, you will have no choice but to use the services of a chartered appraiser. This professional will establish a reliable valuation opposable upon the insurer in case of loss.
Obligation to take out insurance?
Insurance coverage for the improvements to a private portion is not required under the Law. However, most declarations of co-ownership require co-owners to subscribe and maintain such insurance coverage. Moreover, the latter must prove that the insurance is in force - each time they renew their insurance policy or change their insurer - by the means of an insurance certificate sent to the board of directors.
WHAT YOU SHOULD KNOW! Some developers put up for sale unfinished apartments, leaving it to co-owners to make their own improvements to the private portions. This is often the case in historic buildings transformed into lofts. Yet, the cost of such improvement work can be substantial. It is your responsibility to take out insurance that reflects the actual value of the improvements.
WHAT TO KEEP IN MIND: To determine what constitutes an improvement to your private portion, you should refer to the syndicate's technical description, which describes the original layout of the private portion (reference unit). If it has not yet been done, and you are not a first-generation buyers, your seller should provide you with a list of the improvements that he and his predecessors have made, under reserve he has knowledge thereof.
WARNING! Every syndicate of co-ownership created before June 13th, 2018 must adopt before June 13th, 2020 a description of the private portions that is sufficiently detailed that the improvements made by the co-owners are identifiable (refence unit). The syndicate’s inaction to do so could result in the insurance coverage for the building to be insufficient.
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