Chargebacks, Liens & Legal Letters
Condo Insurance Deductible Chargeback: Are You Responsible?
When the corporation's insurance pays a claim, the deductible often gets passed to the unit where the damage started.
Under section 105(2) of Ontario's Condominium Act, if an owner, a tenant, or someone living in the unit with the owner's permission or knowledge causes damage to the unit through an act or omission, the lesser of the repair cost and the corporation's insurance deductible is added to that owner's common expenses. A corporation can extend this to damage the owner did not cause only by passing a by-law under section 105(3). The corporation's standard unit by-law also matters. These deductibles can be substantial, sometimes tens of thousands of dollars.
Whether you're actually responsible for the full amount depends on the cause of the damage, what the standard unit bylaw says, and what your own home or condo insurance policy covers. All three are worth checking before you pay a chargeback notice.
Section 105(2)
Fault-based: owner, tenant, or occupant caused the damage
Section 105(3)
No-fault: requires a corporation by-law to charge back
Standard unit bylaw
Defines what is your unit vs. common element
Cause of loss
The insurer's finding on what failed and where
Your own policy
May include loss assessment or chargeback coverage
How the amount is worked out
Section 105 (2) applies when the owner, a tenant, or a person living in the unit with the owner's permission or knowledge causes damage to the owner's own unit through an act or omission. The amount added to that owner's common expenses is then the lesser of the cost of repairing the damage and the deductible limit of the corporation's policy. In other cases, section 105 (1) treats the part of the loss that the deductible excludes from coverage as a common expense. Section 105 (3) lets the corporation pass a by-law that extends the circumstances in which the amount is added to an owner's common expenses, but only where the damage to the unit was not caused by an act or omission of the corporation or its directors, officers, agents or employees.
Fictional example: the repair costs $18,000 and the policy deductible is $25,000. The lesser figure is $18,000. If the repair costs $60,000 and the deductible is $25,000, the lesser figure is $25,000. This checks the arithmetic only. It does not show that the charge was properly authorized or that the cause was attributed correctly.
Documents that let you check the charge
Ask for these in writing. Some may not exist, and some records may be withheld or redacted under the records rules. The point is to compare the charge with the documents behind it.
These documents help you understand the charge. They do not by themselves show whether a particular charge is lawful. That depends on the circumstances, and a licensed Ontario lawyer can advise on it.
How this differs from a special assessment
A special assessment is an extra charge shared among all owners, normally in the proportions set out in the declaration (section 84 (1)). A deductible chargeback is added to the common expenses of one unit because of damage to that unit. They rest on different authority and need different documents. If your notice does not make clear which one it is, ask. The special assessment article explains the first kind in detail.
Official Ontario sources
- Ontario Condominium Act, 1998Section 105 sets the deductible chargeback rule: subsection (2) covers damage that an owner, tenant or occupant causes to the owner's own unit, and subsection (3) lets a corporation extend those circumstances by by-law where the damage was not caused by the corporation or its directors, officers, agents or employees.
- Condominium Authority of Ontario: ChargebacksExplains the situations, including insurance deductibles, where the Condominium Act allows a corporation to charge costs back to an owner.
What to check first
- 1Request the corporation's insurance certificate and standard unit bylaw.
- 2Confirm the deductible amount charged actually matches the corporation's policy.
- 3Ask for the insurer's claim documentation showing the cause of loss.
- 4Confirm the damage is attributed specifically to your unit, not a common element failure.
- 5Check your own condo insurance policy for loss assessment or chargeback coverage.
- 6Ask whether the corporation's own policy was used before any chargeback was issued.
- 7Get the standard unit bylaw before accepting what counts as your responsibility versus the corporation's.
Common mistakes owners make
- Not realizing your own condo insurance often includes loss assessment or chargeback coverage that could help.
- Assuming the full deductible is automatically your responsibility without checking the cause.
- Not requesting the insurer's own finding on what caused the loss.
- Missing the distinction between standard unit components and your personal upgrades.
- Paying the chargeback before reviewing the standard unit bylaw's definitions.
Documents to gather
- The chargeback notice
- The corporation's insurance certificate or policy summary
- The standard unit bylaw
- The insurer's claim report, if available
- Your own unit owner's insurance policy
- Any contractor or plumber report on the cause of damage
When to get a closer look
- The deductible amount is large relative to what you can absorb.
- The cause of the damage is disputed or unclear.
- The standard unit bylaw's language is difficult to interpret.
- Your own insurer is involved and the two processes need to be coordinated.
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Related reading
Frequently asked questions
Can my condo corporation legally charge me its insurance deductible?
Sometimes. Under section 105(2) of the Condominium Act, if you, your tenant, or someone living in your unit with your permission or knowledge causes damage to your unit through an act or omission, the lesser of the repair cost and the deductible is added to your common expenses. For damage you did not cause, the corporation can charge the deductible only if it has passed a by-law under section 105(3), so ask whether one exists.
Does my own condo insurance help with this?
Many condo or HO6-style policies include loss assessment or chargeback coverage specifically for this situation. Check your policy's declarations page and endorsements.
What if the damage came from a common element, not my unit?
If the cause is a common element failure rather than something inside your unit or exclusive-use area, the standard unit bylaw and cause-of-loss findings matter a great deal in determining responsibility.
How large can these deductibles be?
They vary by building and policy, but corporation insurance deductibles for water damage claims in particular can run into the tens of thousands of dollars in some buildings.
Can I dispute a chargeback I think is unfair?
Yes. Start by requesting the documentation behind it, the policy, the standard unit bylaw, and the cause-of-loss report, before assuming the amount is fixed and final.
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Independent guidance for Ontario condo owners. Not legal advice. Not legal representation. Not an engineering opinion. It is not a substitute for advice about your specific situation from a licensed professional. Condo Owner Advocate helps you understand your situation. You decide what to do.