Water Damage in a Condo: Who Pays, You or the Corporation?

With condo water damage, who is responsible in Ontario depends on three things: where the water came from, where the damage is, and what the corporation's declaration and by-laws say. In general the corporation looks after the common elements and insures the building up to a defined standard unit, and the owner looks after the unit, its upgrades and its contents. The corporation may also be able to charge its insurance deductible back to the owner of the unit where the leak began. Your own documents decide the details, so read them or ask a condo lawyer.

The general split between owner and corporation

Condos in Ontario are governed by the Condominium Act and by each corporation's own declaration, by-laws and rules. The declaration sets the boundaries of a unit and says who maintains and repairs what. Two buildings on the same street can divide things differently.

As a general pattern, the corporation is responsible for the common elements: the roof, exterior walls, hallways, and the shared risers and drain stacks. The owner is responsible for what is inside the unit boundaries. Pipes that serve only one unit can fall on either side of the line depending on the declaration. Balconies and windows are often common elements that one owner has exclusive use of, and those have their own rules too.

What the standard unit means for insurance

The corporation carries insurance on the common elements and on the units, but only up to a basic finish level called the standard unit. That definition is found in a by-law or in a schedule from the original builder. It typically describes builder-grade flooring, cabinets and fixtures.

Anything beyond the standard unit is an improvement, and improvements are the owner's to insure. So are furniture, clothing and other contents. If a previous owner put in hardwood and stone counters, they count as improvements even though you did not install them. This is why owners need their own condo unit policy, and why the improvement limit on that policy should match what is actually in the unit.

Condo water damage: who is responsible in common Ontario scenarios

• A common pipe or the roof leaks into your unit. The corporation generally repairs the source and the damage up to the standard unit. Your policy responds for your improvements and contents.
• Your washing machine hose or toilet supply line fails and damages your own unit. You are generally responsible for your appliance and your contents and improvements. Depending on the cost and the documents, the corporation's policy may cover standard unit repairs, with the deductible charged to you.
• Your leak runs into the unit below. The neighbour's standard unit damage usually goes through the corporation's process, their improvements and contents go through their own policy, and you may face a deductible chargeback or a claim against your liability coverage.
• A neighbour's leak damages your unit. The reverse applies. Report it to management and to your own insurer and let them sort out recovery.
• A slow leak nobody reported. Insurance generally covers sudden and accidental escape of water, and gradual seepage is often excluded. Report drips early.

The deductible chargeback

Corporation insurance deductibles for water damage can be large. Under the Act and many corporations' documents, when a loss starts in a unit through the owner's act or omission, the corporation may be able to add the lesser of the repair cost and the deductible to that owner's common expenses. How far that reaches depends on the wording of the declaration and by-laws.

Many condo unit policies include coverage for a deductible assessment. Ask your broker what your limit is and compare it with the corporation's current water damage deductible, which management can tell you.

What to do in the first hour

1. Shut off the water at your unit shutoff if the source is inside your unit.
2. Call the property manager or the building's emergency line right away. They can shut off a riser and get into other units.
3. Warn the neighbours below and beside you.
4. Take photos and video of the source and all damaged areas.
5. Call your own insurer or broker to open a claim.
6. Do not start tearing out walls or floors until management and the insurers know. Emergency steps to stop further damage, like extraction and drying, should not wait.

Where a mitigation company fits in a condo

Drying has to start quickly whoever ends up paying, because water in a condo keeps moving down through the building. In some buildings management sends its own contractor to every affected unit. In others, each owner arranges drying inside their own unit. Ask management which applies before you hire anyone, and get their approval for any work that touches common elements.

When we work in a condo unit, the owner pays directly and receives photos, daily moisture readings and an itemized invoice. That paperwork is what the insurers and the corporation use to divide the cost afterward. We also need to know the building's rules for elevator bookings, work hours and equipment noise. Before you ever have a leak, find your unit's water shutoff, read the standard unit by-law and check your policy against it.

Common questions