Noce: What is a bareland condo and how is it insured?

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Ask: I live in a bareland townhome style condominium complex. I don’t fully understand what a bareland condo complex really means. The owners are having a dispute with the board regarding our insurance obligations. What type of insurance does our bareland condominium corporation need to obtain to protect our homes? Please help!

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Answer: A bareland condominium complex is very different from a conventional condominium complex. In a bareland condominium complex, homeowners own their individual lot (or parcel of land), along with the buildings on their lot. It is the opposite of a conventional condominium complex where the owners collectively own the land (ie common property) and individually own their units. When you buy a bareland condo unit, you need a real estate report. When you purchase a conventional condominium unit in a low-rise, mid-rise, or high-rise apartment-style building, you do not need a real estate report.

Regarding your insurance question, condominium corporations typically have certain insurance obligations regarding the repair and maintenance of the units in the event of an insured loss.

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However, bareland condominiums are a special type of condominium and the insurance obligations that normally accompany conventional condominium projects do not necessarily apply. Sections 61(1) and (2) of the Condominium Property Regulations establish the risks against which condominium corporations must be insured.

With respect to landless condominium units, therefore, the condominium corporation is only required to insure against those perils to which the landless units or any managed property are exposed, pursuant to s. 61(2) of the Condominium Property Regulations, unless additional insurance obligations are imposed on the condominium corporation through its bylaws. Therefore, a review of your statutes is essential to answer your question. Your bylaws will describe, if applicable, the responsibilities of the owners and the condominium corporation.

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Helpful Hint: Without their bylaws, I am not in a position to comment on the extent of coverage the condominium corporation must obtain. It is best to leave this task to an insurance broker. The condominium corporation and the insurance broker should review the insurance and maintenance obligations of the condominium corporation with respect to the units. Also, a review of the Condominium Corporation’s Standard Description of Insurable Units will help answer some of your questions. The SIUD is designed to provide greater clarity to condominium owners and corporations regarding their respective insurance obligations.

Roberto Noce, QC is a partner at Miller Thomson LLP in the Edmonton and Calgary offices. He welcomes questions from him at [email protected]. The responses are not intended to be legal opinions; Readers are cautioned not to act on the information provided without seeking legal advice regarding their unique circumstances. Follow Noce on Twitter at @RobertNoce.