Condo Owners Face High Costs for Water Damage Originating in Their Units

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Condo Owners Face High Costs for Water Damage Originating in Their Units

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This case highlights that condo owners can be liable for their corporation’s insurance deductible, which can be significant, sometimes reaching $50,000 or even $100,000.

Condominium owners in Canada can face substantial financial responsibility for water damage that originates in their units, even if they are not directly at fault. A 2024 decision by the Ontario Superior Court of Justice, *Abeygunasekara v. Peel Condominium Corporation No. 392*, underscored this, finding owners liable for over $42,000 in repair costs when a toilet in their tenanted Mississauga unit overflowed. The damage, caused by a faulty flapper and a clogged bowl, was exacerbated by a broken shut-off valve, which prevented tenants from stopping the water flow.

This ruling serves as a critical reminder of the importance of unit maintenance and understanding condo corporation bylaws. In many Canadian provinces, including Ontario and British Columbia, condo corporations can charge back their insurance deductible to the owner of the unit where the damage originated. These deductibles can be very high, sometimes ranging from $50,000 to $100,000, or even up to $250,000 in some cases with a history of water claims.

Since January 1, 2020, Ontario condo owners can be automatically responsible for paying the insurance deductible if damage starts in their unit, regardless of negligence. This liability is generally capped, for example, at $50,000 in Alberta and approximately $69,668.01 in Ontario, and typically doesn’t apply to damage from normal deterioration of common property, actions by the condo corporation, or construction defects.

For tenants, this situation emphasizes the necessity of tenant insurance, which typically includes personal liability protection. This coverage can protect tenants if their actions cause water damage to other units or the landlord’s property, covering repair costs and potential legal expenses. Standard tenant insurance in Canada usually covers sudden and accidental water damage from events like burst pipes or appliance malfunctions, and can also cover additional living expenses if a unit becomes uninhabitable. However, it often excludes gradual leaks, overland flooding, or sewer backup unless additional endorsements are purchased.

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