Condo Corporations & Insurance claims Freehold but with a Board in Alberta, CA

Hey all,

I am the president of a condo board here in Calgary, AB. We are technically a freehold since we own our parcels and the townhouse built on it, but we do have a Board and pay condo fees. Per our bylaws they state that the managed property is everything outside of the exterior walls, so owners manage their own repairs in the interior. Our managed property definition is very detailed and strictly states everything to the exterior walls.

We recently had an owner that had a toilet leak which meant they had raw sewage seep into their walls, roof, ect. My assumption would be that because it only affects their unit, that their personal home insurance would cover the cost of repairs. Ours would only get involved if there were multiple units impacted. Our community manager is saying that we have to do the repairs and likely submit a claim, as the estimates for repairs are around 40k. The owners insurer is only willing to cover our deductible that is 25k. Our community manager is saying that because the building is insured that the repairs to the standard unit definition would need to be completed by the condo corporation.

My question is; if the owners are charged with maintaining everything within their exterior walls, does our insurance have to get involved, or should it be their insurance covering the costs? What would stop someone from having an accidental water leak and then asking for a new bathroom makeover then if that is the case? We are requesting that our community manager reach out to a lawyer for clarification, since most our Board is adamant that we should not be putting in a claim.

Our fear as a Board is that if we file a claim our insurance will double for the next three years, and we don’t want to put through a claim we shouldn’t be. I would love to hear some feedback from lawyers with experience in this area.