Can we charge the deductible back to the owner?

The sentence everyone stops reading too early

Section 105(1) of the Condominium Act, 1998 sets the default: the part of a loss that falls inside a deductible is a common expense. Everyone pays. Section 105(2) is the exception, and it is narrower than its reputation:

“… if an owner, a lessee of an owner or a person residing in the owner’s unit with the permission or knowledge of the owner through an act or omission causes damage to the owner’s unit, the amount that is the lesser of the cost of repairing the damage and the deductible limit of the insurance policy obtained by the corporation shall be added to the common expenses payable for the owner’s unit.”

Read the four words in italics. The automatic chargeback reaches damage to that owner’s own unit. A burst hose that soaks the corridor, or the unit downstairs, is not caught by s. 105(2) at all. That damage stays a common expense under s. 105(1) unless the corporation has passed a by-law under s. 105(3).

This is the point boards most often have backwards, and it is expensive in both directions. Charge an owner for corridor damage with no by-law in place and the corporation is levying something the Act does not authorise. Assume nothing can be charged and the corporation absorbs a cost a by-law could have placed where it belongs.

What a s. 105(3) by-law can and cannot do

Section 105(3) lets a by-law extend the circumstances in s. 105(2), which is how corridor and neighbouring-unit damage becomes chargeable. It has one hard limit, and the limit is not negotiable by by-law:

“… but not where the damage was caused by an act or omission of the corporation or its directors, officers, agents or employees.”

So a by-law can reach a tenant, a guest and a neighbour’s unit. It can never reach back to the corporation itself. If the contractor the corporation hired flooded the building, no by-law makes that an owner’s charge.

The amount is a lesser-of, not the deductible

Where the chargeback applies, the amount is the lesser of the cost of repairing the damage and the deductible limit. A $2,000 repair against a $25,000 deductible is a $2,000 charge, not $25,000. Boards that bill the full deductible regardless of the repair cost are overcharging, and the arithmetic is right there in the subsection.

Section 105(4) then makes that amount an insurable interest of the owner, which is the statutory basis for the deductible coverage that sits inside most condominium unit-owner policies. It is worth telling owners this exists.

The owner’s tenant flooded the unit. Can we charge the owner?

Yes, for damage to that owner’s own unit. Section 105(2) names a lessee of an owner expressly, and the charge goes to the owner as an addition to the common expenses for the unit, not to the tenant. The corporation collects from the owner in the ordinary way.

The damage was to the hallway, not the unit. Do we need a by-law?

Yes. Section 105(2) is confined to damage to the owner’s own unit, so common element damage is a common expense under s. 105(1) unless a by-law made under s. 105(3) extends the chargeback to it. Check whether the corporation actually has such a by-law registered before billing anyone.

Do we charge the deductible or the repair cost?

Whichever is lower. Section 105(2) says the lesser of the cost of repairing the damage and the deductible limit. If the repair came in under the deductible, the charge is the repair cost.

Our contractor caused the damage. Can a by-law make an owner pay?

No. Section 105(3) expressly cannot extend the chargeback where the damage was caused by an act or omission of the corporation or its directors, officers, agents or employees. That exclusion survives any by-law.

Is this legal advice?

No. It is general information based on the current consolidation, verified against the source linked above. Whether a particular by-law validly extends s. 105(2), and whether a given act or omission caused the damage, are both fact-specific. For a contested chargeback, talk to a condominium lawyer.