Navigating the Chargeback Matrix

The article discusses the concept of chargebacks in condominiums, focusing on insurance deductibles. The scenario presented involves a flooding incident caused by a leaking toilet in a unit, leading to water damage in multiple units and common elements. The article explains the legal framework for chargebacks in the Condominium Act, 1998, and outlines the conditions under which a chargeback can be applied. It highlights the importance of a well-drafted insurance deductible by-law that extends the application of chargebacks to the fullest extent permitted by the Act. A properly drafted chargeback by-law simplifies enforcement, maximizes the recovery of chargebacks, and may reduce insurance premiums in the long run. Encouragement is given to condominiums to consider amending their governing documents to include a comprehensive chargeback by-law.