Government of New Brunswick
What is the Condominium Property Act?

The Condominium Property Act sets out the rules for operating and managing Condominiums in New Brunswick. The current Act, from 1969, will be replaced by a more modern Act on January 1, 2010. The new Act contains a framework created to protect consumers during the approval, purchase and sale process for Condominiums. It will be administered by the Director of Condominiums.

When will the new Condominium Property Act take effect?

The new Condominium Property Act c16.05 will come into effect on January 1, 2010. Until then, the Condominium Property Act c-16 (1969) will remain in effect.

Properties under construction before January 1, 2010, will be grandfathered under the old rules, providing that a building permit has been issued.

Why is the new Condominium Property Act c-16.05 being introduced?

The new Condominium Property Act will make Condominium development more in line with other Canadian jurisdictions. It will provide Condominium Corporation directors and officers with better tools for managing the Corporation, such as increased transparency, mandatory reserve fund accounts, better financial reporting, and the requirement for reserve fund studies (for larger corporations). Additionally, a 10-day cooling-off period will help potential buyers better evaluate the documents and rules governing the Condominium project they are about to become part of.

What is a Condominium?

A Condominium is a form of home ownership in which individual units of a larger complex are owned, not rented. Condominium owners legally agree to share ownership and maintenance of the shared property, while individually owning their own units. These unit styles are often townhouses, apartment-style units and cottages, but can also be commercial spaces, warehouses, a combination of residential and commercial units and, with the new legislation, could even be the land itself.

What do I own when I own a condominium?

When you own a Condominium, you individually own your unit and you share ownership of a percentage of common property with the other unit owners. Typically, your unit consists of the space within the finished walls of your living space. Unlike an apartment, this means that you own the kitchen cabinets, light fixtures, all the inside partition walls and even the flooring.

The common area that everyone shares or the ‘common elements’ can include halls, elevators, pools, septic systems, land, exterior walls and general structures like the windows, roofs, outside doors and more.

You may also have some ‘exclusive use’ rights over the common elements which are outside of your unit. This is not private ownership; rather it gives you the right to use it exclusively. These could include balconies, parking spaces, storage lockers, driveways and lawns.

What is a Condominium Corporation?

A Condominium Corporation manages the Condominium’s property and business affairs. It consists of the owners of all units in the Condominium complex and is regulated by the Condominium’s by-laws. Some of the Corporation’s duties include:

  • setting up a Condominium Board of Directors
  • managing and maintaining the common areas
  • preparing the annual budget
  • collecting Condominium fees for common expenses and, usually, directing a percentage of it into the reserve fund
  • setting up a reserve fund and ensuring that all owners contribute appropriately
  • adequately insuring the Corporation’s common property and liability
  • holding meetings of owners
  • making sure owners comply with the Condominium Property Act, the declaration, rules and by-laws.
Who are the members of the Condominium Corporation?

All the owners of the Condominium units are the members of the Condominium Corporation.

What is the Condominium Board of Directors?

The Condominium Board of Directors is made up of volunteer unit owners who are elected by members of the Condominium Corporation. The Board must consist of at least 3 people for 4 or more units, or at least 2 people for 2-3 units.

The Board acts on behalf of the Condominium Corporation, and is responsible for ensuring the requirements of the declaration and by-laws are met, as well as overseeing the management of the Corporation.

The Board conducts its business by holding regular meetings. The Board reports to the Condominium Corporation at an annual general meeting or at an extra-ordinary general meeting.

When a Condominium is first created, there is a temporary board of directors appointed by the Declarant. As the units are sold to new owners, they will eventually elect a permanent board of directors.

Who has voting rights?

As an owner of a unit, you have the right and obligation to vote on matters presented at any general meeting, as well as changes to common property, regulations and by-laws. At most general meetings, votes are conducted by a show of hands, but you may also vote by proxy.

If more than one person owns a unit, their vote counts only as one. Check your by-laws for clarification on who has the right to vote.

What are the Condominium by-laws?

Every Condominium must have a set of by-laws, which governs the Condominium units, the common space, as well as the rights and responsibilities of all involved. These by-laws can vary greatly from complex to complex. For example, some may not allow children or pets to live in the complex. In other complexes, if you want to renovate the inside of your unit, you may need permission from the Condominium Corporation.

Collectively, owners can change the by-laws to suit their particular complex. At least 60 per cent of the owners must vote in favour to allow changes in the by-laws. Any amendments have to be registered in the Land Title Office for it to take effect. All owners and everyone occupying the units must abide by the by-laws of their Condominium Corporation. In some special cases, by-laws may allow the Corporation to fine its owners if they don’t follow the rules.

What are Condominium fees and why do they exist?

Condominium fees are the fees that Condominium owners pay to cover their share of the common expenses associated with running a Condominium and maintaining the common property elements. Common expenses could include insurance premiums, snow removal, gardening, repairs and maintenance to common property, property management fees, contributions to the reserve fund and more.

Condominium fees are often paid monthly, and can be divided into several funds. The fees are typically set based on an estimated annual operating cost for the entire Condominium.

What is a reserve fund and why does it exist?

A reserve fund is used to pay for the major repairs and replacement of common property, such as replacing the roof or painting the outside of the building. It is regulated that the monies from the reserve fund can only pay for major expenses and not for emergencies or unexpected expenses. A contingency fund should be set up for these purposes.

All owners must contribute appropriately to the reserve fund. Typically, a portion of each owner’s Condominium fees are directed into the reserve fund on a monthly basis, but some Corporations could choose to do it by special assessment on a quarterly or semi-annual basis. Condominium Corporations may not mortgage the common elements to raise money for major repairs and replacements; they are usually funded through reserve fund fees and special assessments only.

As of January 1, 2010, all Condominiums are required to have a reserve fund. However, the Act will allow Condominium Corporations existing before January 1, 2010, to have five years to build a reserve fund.

How much money should be in the reserve fund?

For small complexes with 10 units or less, the reserve fund must be equal to the annual budget. For large Condominium Corporations with 11 units or more, a reserve fund must maintain at least the minimum amount recommended by the reserve fund study for anticipated major repairs and replacements.

What is a reserve fund study?

A reserve fund study is an analysis of anticipated major repairs and replacements that the Condominium complex will need to undergo in the next 30 years, along with an estimated budget that indicates the needed contributions.

The qualified person who completes the reserve fund study must prepare a report on the common property. It should include:

  • information on what may need to be repaired or replaced within the next 30 years
  • an assessment of the current condition of the common property
  • estimates for costs of repair or replacement
  • a recommendation on the amount of money that should be in the reserve fund.
Why are reserve fund studies important?

Reserve fund studies are important in helping the owners determine how they must budget for upcoming major expenses. It’s a kind of a road map that details an estimate of the future major expenses needed to maintain the common property. Should the reserve fund not have enough money to cover a major repair or replacement, the Condominium owners may be asked to pay an additional fee to cover this cost through a special assessment – and it could be substantial.


When does a reserve fund study need to be done?

Corporations with more than 10 units must complete a reserve fund study every 10 years and it must be updated every 3 years. Corporations that existed before January 1, 2010, will have five years to complete the reserve fund study. As of January 1, 2010, the Declarant will need to complete the reserve fund study before his project will be approved.

Who can conduct a reserve fund study?

Only a “qualified” person identified in the Regulations (usually an engineer or an appraiser) can conduct a reserve fund study. A qualified person would be someone who is knowledgeable about:

  •  depreciating property
  • the operation and maintenance of depreciating property
  • the costs of replacements or repairs to depreciating property.

The Board or Declarant is responsible for hiring a professional to complete the reserve fund study.

Who pays for the reserve fund study?

In a new project, the Declarant will bear the cost of the reserve fund study since it is a requirement for approval of the project. In the case of Corporations existing after the coming of the Act, the owners will pay for the reserve fund study, and it qualifies to be paid for from the reserve fund.

What is a contingency fund and why does it exist?

A Corporation may set up a contingency fund to be used for purposes specified in the by-laws. This fund usually serves to cover unexpected expenses like emergency repairs not planned for in the operating budget or to cover shortfalls in the operating budget at the end of the year, if necessary.

Will I be charged any other fees from the Condominium Corporation?

If there are unforeseen events such as a dramatic increase in heating costs or the need for a major repair, there may be a shortfall in the operating budget (from the Condominium fees) or the reserve fund. When this happens, each owner could be asked to contribute additional fees in the form of a special assessment charge or increased Condominium fees for a set period of time.

What are the advantages of Condominium ownership?
  • Owning a Condominium can make it possible to get into the real estate market in more expensive areas, such as close to downtown or on the waterfront.
  • Many people enjoy Condominium living because they are not generally responsible for day-to-day maintenance such as snow removal and lawn care.
  • Owners can travel knowing that the exterior of their property will be maintained while they are away.
What are the disadvantages of Condominium ownership?
  • Group decision making: Individual decision making gives way to decision making by the group of owners. You may not always agree with every decision.
  • Privacy: Community living can have its ups and downs, and your enjoyment of your property can be affected by your neighbours, the amount of noise or smells coming from their homes and their backyard activities.
  • The rights of entry: The Corporation and its agent has the right to enter your unit anytime in cases of emergencies, and between 8am and 8pm Monday to Friday upon giving 48-hours notice to the owner.
  • Complex occupants: The complex may be mainly owner occupied or it might be dominated by rental occupants. Absentee owners may not have the same maintenance and repair priorities as owners who occupy their units.
What should I know before I buy a Condominium?

Before you buy a Condominium, you need to know how the complex is run and financed so you can make an informed decision. Understand what you will own.

There are several types of Condominium developments and, depending on the type you chose, it can make a difference in the type of information that might be available for review.

  1. When you buy from a developer (called a Declarant under the Act), there are three possibilities:
    i. The unit is part of a new building, also known as a new sale
    ii. The unit is part of a phased development project
    iii. The unit is part of a converted building, like an older apartment building or townhouse complex known as a conversion.
  2. When you buy from an existing owner, things can be different. This is commonly known as a re-sale.

Depending on the options above, there are different documents that can be supplied to you and it is important you read them and/or get legal advice. Besides the questions common to the purchase of any property, here are some more questions that are also useful to ask when considering a Condominium:

  • What are the unit boundaries?
  • What will my maintenance obligations be?
  • Is the corporation self-managed or managed by a professional management company?
  • What are the Condominium fees and what do they cover?
  • How much money is in the reserve fund?
  • Are any major renovations or repairs expected in the next 10 years?
  • What are the rules regarding the allowable number of occupants, noise, pets, amenities, parking, etc., and how are these upheld?
  • Can I alter my unit’s appearance? If I want to change something, what procedure do I have to follow to get permission?
  • Can I decorate my deck, patio or my hallway door for the various holidays?
  • Can I have a clothesline or a satellite dish?
  • Does the Condominium Corporation have the insurance required by the Act to protect my investment in a unit?
  • What will my insurance obligations be?
What should I know about buying from a developer?

If you are buying from a developer on a pre-sale contract, read the documents carefully and make sure you know what work still needs to be done on the Condominium development, and what the expected completion date is.

Before you buy, the developer must provide you with a copy of:

  • The agreement of sale and purchase which should include:
    • In the case of a new sale:
      • the Condominium plan or the proposed plan
      • the declaration or proposed declaration
      • the by-laws or proposed by-laws
    • In the case of a phased development:
      • a disclosure statement about how the project will take place
      • a statement that the Declarant is not required to continue the project after this phase
      • if applicable, an estimated timeline of the phases
      • if applicable, a statement describing the type of buildings and the number of proposed units
      • a statement of the proportions of the common interest and common expenses attributable to the units after each phase
      • a list of the facilities and services the owners will share
    • In the case of a conversion:
      • All the same documents as a new sale, but in addition:
        • if the building has 10 units or less, the agreement will have to contain a current building inspection report paid for by the Declarant
        • if the building has 11 units or more, the agreement will have to contain a reserve fund study paid for by the Declarant
  • After receiving all required documentation, the purchaser has a 10-day period to review the documents. If anything found in the documents affects the purchaser’s decision to buy the Condominium, the purchaser may make an objection to the vendor in writing within the 10-day period. If the vendor and purchaser can’t or won’t come to an agreement, the agreement shall be void, and the deposit shall be returned to the purchaser, without interest or liability by the vendor for any expenses or damages caused by the purchaser.


What is phased development?

Sometimes, Condominium projects are developed in phases over time. If you are buying a unit that is in a phased project, you should review the conditions of the phased development disclosure statement that would be include in the declaration. Be sure to thoroughly understand how the points in the disclosure statement would affect you.

The disclosure statement will include:

  •  a disclosure statement about how the project will take place
    • a statement that the Declarant is not required to continue the project after this phase
    • if applicable, an estimated timeline of the phases
    • if applicable, a statement describing the type of buildings and the number of proposed units
    • a statement of the proportions of the common interest and common expenses attributable to the units after each phase
    • a list of the facilities and services the owners will share  


What should I know about buying a previously owned Condominium?

When you buy your Condominium from the owner of the unit, you should ask the Corporation or the owner, in writing, for an Estoppel Certificate. Be sure to read and understand the documents enclosed before finalizing your offer to purchase.

The Condominium Corporation shall provide you or the owner who made the request the certificate and accompanying documents within 10 days. The legislation lays out what the content of the certificate should be. See Question 27 for more details. Often the seller, real estate agent, Condominium Corporation or your lawyer can help you get these documents.

It’s a good idea to talk to people who own units in the same complex you are considering, as well as the manager or a member of the Board of Directors. These people can all give you valuable information about owning a unit and living in the complex, as well as details about the way the Condominium Corporation is run.

What is an estoppel certificate and why is it important?

An estoppel certificate is a signed statement from the Condominium Corporation that certifies that the documentation they have provided you or the owner with is accurate. It is important for the buyer to ask for one.

The estoppel certificate tells you:

  1. the amount of any assessment and accounts owing by the owner to the corporation for which the corporation has a lien or right of lien against the unit and common interest of the owner;
  2. the manner in which the assessment and accounts are payable;
  3. the extent to which the assessment and accounts have been paid by the owner;
  4. the unit identified by unit number, level number, Condominium corporation number and any applicable civic and suite numbers;
  5. the name, address and telephone number of the Condominium management company or manager;
  6. the names and addresses of the officers of the corporation;
  7. the current amount of the common expenses and whether they are prepaid or collected as they become due;
  8. how the reserve fund is collected and, if collected as a percentage of common expenses, what that percentage is;
  9. the balance of the reserve fund;
  10. any assessments that are due in the current fiscal year;
  11. any major capital expenditures that are planned by the corporation;
  12. any lawsuits that have been instituted or are pending by or against the corporation;
  13. the debt carried by the corporation from previous expenditures;
  14. any insurance coverage and the amount or value of each policy;
  15. the content of any proposed by-laws, proposed amendments to existing by-laws or proposed amendments to the declaration;
  16. the name of each person who owns 10% or more of the common elements; and
  17. any other information prescribed by regulation.

The Corporation may charge a fee for the certificate.


What is an agreement of purchase and sale?

An agreement of purchase and sale is a contract by which one party agrees to sell and another agrees to purchase. The seller can either be a Declarant or an existing unit owner. Depending on who the seller is, the agreement of purchase and sale will have to include various documents. See Question 24 and/or Question 26 for more details.

It’s a good idea to consult with a lawyer before you sign an agreement of purchase and sale so that you are fully aware of all of the provisions in the agreement and there are no surprises down the road.

Can I cancel the agreement of purchase and sale?

In the case of an agreement for purchase and sale between a Declarant and a buyer, the buyer can cancel an agreement of purchase and sale for reasons specified in the legislation within a 10-day period, commonly referred to as a “10-day cooling-off period”. Other conditions might apply if they are part of this contract.

What are the owners’ rights and responsibilities?

When you own a Condominium unit, you have the right to:

  • Vote on matters affecting unit owners
  • Use common areas
  • Get information on the management or administration of the Corporation
  • Use mediation, arbitration or court action to resolve disputes with the Corporation, the Board or other owners

As a Condominium owner, you have the following responsibilities:

  •  To read the Act, regulations and by-laws
  • To abide by the Act, regulations, by-laws, and rules, and ensure your family, tenants and guests do so as well
  • To attend general meetings, information sessions, serve on the Board or on a committee and vote
  • To read the minutes of the general meetings and board meetings, the budget, financial statements, reserve fund study and the Corporation’s newsletter
  • To maintain your own unit and any exclusive use common property
  • To get insurance to cover your liability and belongings
  • To pay all Condominium fees and assessments on time
What rules and by-laws should I be familiar with?

Every Condominium is governed by its own unique by-laws and rules. These are necessary to ensure that Condominiums are properly operated and maintained, and to define the rights and obligations of individual owners. By-laws are part of the registered documents (with the declaration and description) and are more difficult to change, whereas rules tend to be at the discretion of the board of directors and can be changed more easily.

With respect to by-laws regarding the individual owners, Condominiums may have restrictions regarding the number of occupants per unit, pets, noise, parking, and when certain amenities may be used.

Many Condominiums have strict rules concerning the alteration of the unit space or its appearance. Additionally, you may have to get permission from the Condominium’s Board of Directors before you do the following: change exterior fixtures, install a satellite dish, add a new gazebo, install air conditioning units in the windows, and in particular, make changes that may affect the Condominium’s structure or safety.

Individual Condominium owners may be obliged to attend Condominium meetings or serve on Condominium boards or committees. All Condominiums have requirements for the payment of monthly Condominium fees. There will also be mandatory charges for a reserve fund for unforeseen major repairs to the Condominium common elements.

Can the owner modify common elements or assets?

Typically, the owner cannot modify common elements or assets without the written permission of the Condominium Corporation.

Can I rent my Condominium?

You can always rent out your Condominium, but check the declaration and by-laws to be sure of the details. When renting to someone else, typically you would need to notify the Corporation, in writing, of your intent, your future address, and the amount of the monthly rent. Some Condominium developments will only permit long term leases, whereas some others might be just an overnight rent. The declaration will define the terms. You now become a Landlord and have to abide by the Residential Tenancies Act. A lease will be required and certain conditions will apply to your tenant.

Can anyone enter my unit?

No one may enter your unit without your permission or without giving you proper notice, unless there is an emergency. An emergency includes the provision of water, power, heat and any other service that would affect other owners.

If there is no emergency, you must be given at least 48-hours notice before someone can enter your unit to repair a problem. The hours for entry are between 8am and 8pm, Monday to Friday.

What taxes do I have to pay and what do they cover

The Condominium Corporation does not pay property tax. The owners will pay property tax on the unit plus their percentage share of the common element. The amounts are not necessarily broken down on the property tax bill. The current taxes should be noted in the purchase documents. It’s a good idea to double check with the municipal government to confirm the taxes.

In some New Brunswick municipalities, they do not provide services to Condominiums such as clearing snow or picking up garbage. The owners’ Condominium fees would be used to cover those types of services instead.

Who takes care of the building and the grounds?

Day-to-day operations for maintenance and repair for the common areas (i.e., lands, hallways, roofs, exterior walls, decks, patios and doors) are managed by the Board on behalf of the Condominium Corporation. Some Corporations choose to have a permanent manager to do these chores. Each owner shares in these costs by paying a monthly Condominium fee.

Maintenance duties for the Condominium Corporation can include:

  • Common plumbing, electrical, heating and air-conditioning systems
  • Roof and wall repairs
  • Windows and doors – repairs and replacement
  • Lawns and garden care
  • Recreational amenities
  • Parking areas

Each owner is responsible for any and all repairs within his or her respective unit. Maintenance duties for the unit owner can include:

  •  Internal plumbing, appliances, heating, air-conditioning or electrical systems that are in the unit and only used by the unit
  • Cleaning window surfaces that are accessible only from inside the unit
  • Cleaning exclusive use elements, such as balconies and patios.


How do owners, developers and employees of the Corporation resolve disputes?

If a dispute arises between an owner, developer or employee of the Corporation, they should speak directly with the person involved and try to resolve the problem. If the conflict involves the by-laws, the Act, the regulations or the Corporation, a written complaint can be filed with the Board of Directors. Mediation and/or arbitration can be used as an alternative to court action if the dispute remains unresolved.

What is a declaration?

The declaration is a document that creates the Condominium Corporation. It creates the units and the common elements. It allocates responsibility for the repair and maintenance of the units and common elements; outlines the Condominium’s provisions regarding occupancy and use; specifies common expenses and each owner's proportionate interest in the common elements; and details each owner's percentage share of the overall common expenses.

What is a description?

The description is the combination of a plan of survey, construction and structural plans, and details of the unit boundaries for Condominiums.

What are the different Condominium property classifications?

Condominium properties are now classified as follows:

  • Commercial – contains a building that is intended to be divided into units for commercial use, or has more than one single detached building that is intended for commercial use
  • Residential – contains a building that is intended to be divided into units to be used for residential premises, or has more than one single detached building that is intended to be used for residential premises
  • Bare-land – consists of land on which buildings may be located or constructed after purchase
  • Mixed-use – contains more than one of the classes of Condominium property described in this section
  • Phased-development – Condominium property in relation to which the Declarant may create additional units or common elements by amending the registered declaration and description.
What is the approval process for creating a Condominiumminium?

The approval process is a multiple stage process:

  1. In the first stage, the Declarant or his agent (normally his lawyer or land surveyor) advises the Director of Condominiums of his intentions to create this new Condominium project, the number of proposed units and an approximate timeline. The Director will assign a name and number to the Corporation so that the draft documents can refer to it, but the Corporation and its name will only become legal or official when the declaration, description and by-laws are registered under Land Titles.
  2. In the second stage, the Director of Condominiums will review the final version of the declaration, survey plan, by-laws and a visit of the buildings. Any changes or corrections will get finalized at this stage.
  3. In the third and final stage, the developer must submit to the Director of Condominiums the approval fees and the Land Titles registration fees, along with the following documents for the official approval and registration:
    - a declaration
    - a description
    - a certificate of registered ownership from the Land Titles office
    - the proposed by-laws for the Condominium Corporation
    - a copy of the building permit or the development and building permit or a letter stating that no building permit is needed and no zoning requirements need to be met (in some cases only depending on the location)
    - a copy of reserve fund study if the project has more than 10 units
    - a building inspection report only in cases of a conversion of an existing building with less than 10 units
    - a list of the temporary directors
    - proof of insurance under the name of the Condominium Corporation
    - any other information that the Director deems important
  1.  The Director will do the following:
  • endorse a certificate of approval for registration on each document
  • deliver a copy of the endorsed documents to the Registrar of Land Titles
  • The Registrar of Land Titles will register the declaration, description and other documents under the Land Titles Actand return the extra copies to the Declarant or his agent.
  • Once this has taken place, the Condominium Corporation exists, the units are created, temporary directors are in place and the Declarant can now issue deeds or transfer documents to the people who purchased units.
What are the fees to get your Condominium development project approved?

Approval fees for developers will be introduced as of January 1, 2010, and will range from $1,300 for a two-unit development to $20,500 for a 50+ unit development.

The prescribed fees for revision and approval of the documents will be based on:

  1. $500 per project (A phased development project will pay this only once.)
  2. $400 per unit to a maximum at 50 units. (Ex: Fees would be the same for a 75-unit project or a 50-unit project.)

Note: All fees for registration under Land Titles are in addition to the approval fees.


What are the approval fees being used for?

The approval fees will be used to directly offset the costs of the new Act and its framework, and the maintenance of a database of Directors, including the salary of a Director of Condominiums and support staff to oversee this program.

What is the cooling-off period?

The legislation regulates that when you are buying from a Condominium developer (also known as the Declarant), you get a cooling-off period of 10 days after you receive a copy of the signed purchase agreement and all the documents required by regulation. During this period, you are able to see a lawyer and get advice on the purchase agreement. At any point during those 10 days, you may cancel the purchase agreement and pull out of the deal.

To cancel, you must give written notice to the seller within the 10-day cooling-off period. The seller must promptly refund without interest all the money received from the buyer without deducting a charge.

This cooling-off period is mandatory for sales from the Declarant, but it may also be used by the Realtors Association or any other seller on any agreement of purchase and sale in the province, thereby extending this consumer protection feature to a wider spectrum of purchasers in the province.

Does the Condominium Corporation need to prepare and submit financial statements every year?

Yes. All Corporations must have annual financial statements prepared that show its assets and liabilities, as well as its income and expenses. At least ten days before the annual owners’ meeting, the Corporation must file a copy of the statements with the Director of Condominiums and mail or deliver a copy to each owner.

If the Condominium complex has more than 10 units, a qualified person (usually an accountant) must review the statements before being filed with the Director.

Do Condominium Corporations have to submit proof of insurance?

The answer is yes and in many situations, just to name a few:

  • To the Director of Condominiums annually or whenever the policy is renewed.
  • To its owners or the agent of an owner if requested by them.
What must the Condominium Corporation insurance cover?

The insurance should cover the Corporation’s liability to repair the units and common elements after damage resulting from fire and other risks identified in the declarations or by-laws. This obligation is set out in section 50(1) of the Act. It is critical the Corporation review these documents with an insurance broker to identify what needs to be covered under the master policy.

Generally the condominium corporation’s obligation to repair the unit is to restore to its original state, i.e. to the way it was originally constructed.

Betterments and improvements to a unit that any particular condo owner has done to his/her units would be excluded from the condominium’s corporation obligation to insure. (e.g. individual condo owner installing a very expensive hardwood floor to replace the original carpeting).

Who pays for the Condominium Corporation insurance?

Typically, the unit owner’s portion of the cost of the insurance purchased by the condominium corporation is included in the monthly condominium fees and taken from the operating fund. Check this with the condominium corporation.

Is your new condominium insured for its replacement cost?

A commonly misunderstood issue at the turnover meeting for a new condominium is whether an insurance appraisal is required. It is often assumed that a developer’s construction cost is an accurate reflection of the replacement cost of the condominium and an insurance appraisal is not necessary. Insuring a condominium for its construction cost often results in an under-insured or over-insured condominium property. That insurance appraisal should also be done on a regular basis, for example, prior to each renewal of the insurance policy. The reason is simple, if a major catastrophe occurs where the property is substantially damaged and the insurance coverage is inadequate, where do the funds come from to repair and/or replace the damage? The owners could be required to pay significant assessment to facilitate the repair or replace the damaged property.

As the owner do I need insurance?

All condo owners should consider having insurance, especially liability coverage. The Act only requires the corporation to get insurance but you as a condo owner could be required to have insurance in the following cases:

  • Your lending institution may make it mandatory if you have a mortgage.
  • The condo declaration may have a section making it mandatory for you to have  


As an owner, what should I insure?

With respect to property, the owner may wish to insure any betterment to the unit, including those installed by a previous owner, and any personal belongings. It is important to familiarize yourself with your declaration, by-laws and master policy and provide a copy to your insurance agent or broker to eliminate the possibility of any gaps in your individual coverage or duplication with the insurance the condominium corporation has.

Example of betterment
Original carpeting would cost $2000 to replace at today’s prices; unit owner installs hardwood floor that costs $5000, the condo corporation’s insurance would cover the $2000 (less any deductible applying); unit owner may wish to insure the $3000 difference.

If I own a bare land condominium unit what do I insure?

The master policy will not cover the structures on a unit thus, as a unit owner you may want to insure any structure on the unit. Also, like any other type of condominium unit, the owners may wish to get liability coverage.

Does the Corporation need insurance for other type of liability insurance?

Condominium corporations are responsible for the upkeep of common property, which are the common building elements such as roofs; parking areas; sidewalks; entrance ways and many more. For example since the condominium corporation is responsible for snow removal of parking areas, a slip and fall injury from an owner or a visitor could result in liability being assigned to the condominium corporation. Similarly if a pipe broke in the common area walls or the foundation starts to leak in a unit, the corporation may be responsible for the damages to the owners.

Do I, as an owner, need to provide a proof of insurance to the Director of Condominium?

No, only the Condominium Corporations needs to submit proof of insurance.

As a tenant, what should I insure?

As a tenant, you may well wish to understand the insurance coverage that the condo unit owner has.

Consultation with an insurance agent or broker is recommended to ensure you, as a tenant, have the coverage that is appropriate. In your case, a tenant’s package may be sufficient for your personal belongings and public liability.

Whose insurance will respond and who will pay the deductible?

If the unit or common elements are damaged, the condominium corporation’s insurance will respond and the Corporation will pay the deductible.

If damage to the common elements is a result of an act of negligence or omission on the part of the owner and contained within their unit, the condo corporation can charge back an amount up to an amount equivalent to the deductible. Owners may obtain insurance to cover the amount of the deductible through their individual insurance policy

If it is personal property or an improvement to the unit that is damaged, then a claim against the condo unit owner’s policy will be made and the unit’s owner will need to pay the deductible.

What is an insurance trustee?

The purpose of an insurance trustee is primarily to protect the interests of mortgage lenders as well as the owners. In the event of a large claim, the cheque is issued to the insurance trustee to ensure these funds are used solely for repairing the damage covered by the insurance policy.

Do I need to have a copy of the master policy?

You should supply a copy to your own insurance agent or broker so that they can evaluate what the Master policy covers and what you need to cover, otherwise you might be paying double for the same coverage of be under insured.

Do we need Director’s liability insurance?

It is not mandatory under The Condominium Property Act that condominium board of directors and officers obtain liability insurance. It is optional in most provinces including New Brunswick.

Is it safe for condominium board not to have liability insurance?

This is a major decision for the Board. We would strongly suggest that the board consult with an insurance agent and broker about the type of coverage that is available. Likewise, it may wish to discuss with its lawyers as to the legal ramifications of not having proper insurance and the coverage that be appropriate from a legal perspective. In summary, you as a director or officer of a condo corporation could be sued in your capacity as a director/officer of the condo corporation for an omission or error and you need to understand your personal legal exposure to such an action and to what extent insurance coverage alleviate any concerns you have in serving as a director/officer.

Are volunteers covered under the corporation’s policy?

Depending on the level of risk involved with the tasks they undertake, it can be as simple as providing your insurance broker with confirmation of the committee/volunteers and their anticipated role. Contact your insurance provider for specific details to determine whether your situation qualifies for additions to your coverage and maybe to your premium to cover the volunteers within your community.