Recommendations, Tips and Tricks Timely Advice from the Experts
By Quintin Johnstone, President & CEO of Riskboss Inc.
Reader Commentary From Our Last Edition
We live in a condominium serviced by Samsonshield as the security provider. We travel a lot and sometimes for many months. If I were not for the advice that we got from Samsonshield before we left on our trip about the extended absence check program, we may have had our insurance voided. Thanks Samsonshield for the extended absence checks that you did on our unit while we were away.”
Carla V. and Stephanie L. Condominium Residents in Toronto
Many condominium residents travel for extended periods for either leisure or work. The stark and unfortunate reality is that countless true-life horror stories are emerging for condominium residents. Absent residents are getting calls from property managers advising of serious issues while they are away, predominantly due to water leaks.
Water damage caused by faulty appliance piping and hoses, incorrect installation of washing/dishwasher machines, poor contracting and illegal renovations are just some of the causes of major water leaks. In many cases, water can negatively impact multiple units below the source of the water. Thousands of dollars in water damage can occur in each affected condominium unit.
Another unfortunate trend is turning heads in lawyer, property management and insurance circles. With the growth of investment condominiums in the Greater Toronto Area, condominium owners are getting calls from property managers about tenants who have left for extended absences and reporting problems. More often than not, owners find that tenants have not had anyone check in on the condominium during their absences, and it voids their insurance.
Not widely known is a clause in most condominium insurance policies that stipulates that during extended absences where your home will be vacant, residents must have someone check in on the property to make sure the property is okay. Each policy is different with respect to how often suite checks must occur and who can be designated as a competent person to make such visits. The best way to ensure that you have enough insurance and the right insurance is to work with a qualified insurance broker or provider.
One of the country’s foremost experts in condominium law, Mr. Gerald Miller was canvassed about this issue. Mr. Miller is the managing partner of Gardiner, Miller, Arnold LLP, one of the largest condominium law firms in Ontario. His firm deals with these issues far too often.
“Condominium insurance is very complex. Each condominium corporation has its own insurance; each unit owner should have an owner’s policy, and each owner who rents out their unit should also insist that their tenant has a tenant’s policy. If a loss occurs, all that matters is that there is insurance coverage.
We have found that the biggest losses come from water damage due to washing machine and dishwasher hose failure. It is important for everyone to know what an owner’s insurance policy says about closing that door to your condominium and heading to Florida for the winter or an extended vacation. A typical Condominium Owner’s policy provides as follows:
Loss or Damage Not Insured: We do not insure loss or damage …. occurring after your unit has, to your knowledge, been vacant, for more than 30 consecutive days.
Therefore, it is critical for every owner of a condominium unit to review their policy to determine the time frame their property can be vacant before their insurance policy excludes coverage. If your vacation plans exceed the time frame in your policy, you should contact your insurance company to determine what steps you can take to avoid exclusion or if you can
purchase additional coverage. It could be as simple as having a friend, family member or service monitor your unit.”
Insurance for condominiums in Ontario is multi-layered:
- The building and grounds;
- Common areas and amenities; and
- Standard Unit (or the original state that the developer provided to the original owner).
- The property owner gets their own insurance for their unit, locker, parking space and for something called, Betterments and Improvements; and
- Tenants also get their own insurance.
Ask your property manager and/or your Board to consider developing an Extended Absence Program for your condominium community. It is an opt-in program where the building superintendent and security enter your unit according to the terms of your insurance to make sure everything is okay. Running water and flushing toilets will also prevent P-traps from drying out, which is the cause of carbon monoxide entering into units. Mail collection is also part of the program. Contemporaneous reports by security will ensure that your insurance will never be voided while you are away. An indemnity for the corporation is part of the program.
The program is usually free of charge and is designed to mitigate risk to the whole community because a pinhole leak today can be the cause of a major flood in a week if left unchecked.