Water damage from flat upstairs - I'm being charged insurance excess

[Nelly30]

Hi everyone,

Found a couple of threads on this one but no definitive answers.
In this post, Jeffrey suggests its down to what in written in the lease (will come onto later):
http://www.landlordzone.co.uk/forums/showthread.php?t=26059&highlight=water+damage+excess

Scenario: We had a leak from the flat upstairs (I think the cause was a faulty overflow) which damaged my flat underneath. We have claimed on insurance which involved me filling out all the forms, getting multiple quotes, overseeing the repair etc (i.e. a lot of my time expended).

To my horror the management company say I am liable to pay the excess! If I have not caused the problem why should I be penalised? Surely I should be billing for my wasted time instead! I contacted management company asking them to use some common sense (along with a breach of duty of care to me by the upstairs landlord) and either bill the landlord of the flat upstairs or failing that, charge as part of the service charge.

They have sent me payment for the repair deducting the excess. Their comments were that the landord of the flat upstairs had "declined" to pay the excess and the reason it has not been billed as service charge is because the Director of the management company doesn't agree with that!

Our lease says the following:

"To make good any damage caused through the act or default of the Lessee:-

b/ to any other occupier or lessee of the building on the esate and keep the Lessor indemnified from all claims expenses and demands in respect thereof.

Not to do or permit or suffer to be done anything whereby the policy of insurance by fire or other risks for the time being subsisting may become void or whereby the rate of premium thereon may be increased and forthwith to repay on demand to the Lessor all sums paid by way of increased premiums and all expenses incurred by the Lessor in or about the renewal of such policy rendered necessary by a breach of this covenant."

My interpretation of the above is that the upstairs landlord should be liable.

Any suggestions please??

Thank you

[leaseholdanswers]

1; Lease: it is uncommon to find the insurance excess dealt with in the lease.
2: I would argue that the landlord is responsible for insuring the building, and the fact that they cannot insure the first £250 or £500 (the excess), requires a provision for the excess on claims, based on the claims history, as part of calculation of the insurance element in the budget.
3: I would also argue that under the terms of the lease, your obligation is to pay that service charge, and there is no further provision in the lease for the recharge of an excess service charge, in the present circumstances.
4: The leases do allow for an indemnity for any claims or costs that may arise ( re quote the para you posted), and therefore they should endeavour to recover the excess under that clause under the lease for the flat from where the leak arose.
5: As specific provision is made in the lease for insurance, any sweeper clause in the lease would not apply ( this is a clause which says any costs in the interests of good management etc).

In practice unless they can prove that there was negligance and thereby fault on their part they wont be able to.

6: Explain that the excess will be deducted from the next service charge payment, and should they disagree, then you will be happy to assist when they make an application to the LVT.

Mnay agents do deduct the amount from the innocent party and it is wrong.

[Nelly30]

Thanks for your posting Leaseholdanswers. Some very useful ideas and points which I am sure to use.

I was thinking before of deducting the remainder from my next service charge but expressly telling the management company that I was accepting the current amount only to help pay the builder and that I still refute their decision.

I think it is clear this is wrong. It gives no incentive for the upstairs landlord to have his plumbing checked if I'm paying the excess every time!

[billericayboy]

Looking at this from an insurance stand point, is there block insurance or is it down to individual flats to insure ?

If there is block insurance then the damage was caused by the leak in the upstairs flat, they would have the damage to their walls and floor repaired uder the insurance and you should have had the repairs to your flat repaired and only one excess charged. The building managers should charge this to the upstairs flat as it was their lack of maintenance that caused the loss.

If each property has its own insurance then you would have claimed 100% of your costs against the upstairs flat as a third party and not been laible for any excess (hence upstairs pays in previous para.).

Did insurer pay for the repairs to upstairs flat direct to the builder ?

Write to your broker and ask them why you have not had your claim paid in full as your property was damaged by the upstairs flat you should not have to pay an excess. You as a owner of part of the property are an assured under the policy so they have to answer your questions.

it sounds like the managers are weak and are deducting the excess from your payout rather than claiming it back from the upstairs flat.

Good luck

[leaseholdanswers]

Even if there are two or more claims on a single incident, only one excess shuld be deducted by the insurers on settlement.

It can only be charged back to the flat above if you can prove they are at fault by act or ommission.

As its hard to recover from them, unfair to charge to the flat below and the excess a commerical termof insurance,ie the insured pays the first £x, it should be a service charge cost.

[Nelly30]

Thanks everyone for your postings; all suggestions I tried. I have decided to pay the excess because the Management company said they would start adding their additional costs and look to take me to court.

They claim the owner of the upstairs flat, where the leak originated from, has no legal obligation to pay the excess and that he refused to pay. Honestly, the person clearly has no decency after all the mess this has caused me - I would feel ashamed.

I suppose my only option is to bring this up at the next leaseholders meeting. As I said before, how can this possibly make sense?? I don't know the quality of repair he has carried out and if this happens again, no doubt I will have to pay the excess again :( The sheer principle is wrong...

[leaseholdanswers]

Please don' t waste your time and energy. Right or wrong is irrelevant. It will only make you feel better but achieve very little .See the post back in July.

Go to the LVT website and apply to challenge the cost by written representation.

Ask for help here with that, and we willl happy to do so.

[Always Problems]

Treat this as if it was a car accident. You write to the occupier of the flat above you stating that you hold them fully responsible for the water leak from their flat which has damaged your property and although you intend to claim on an insurance policy any difference between the cost of the repair and what you may receive will be their responsibility.
It is then up to the owner of the flat to go to the management company and any argument over the excess should be between the flat owner and the management company. You ar simply a third party who has suffered because of defective premises above you. You should not have to suffer finantially yourself.

[leaseholdanswers]

Sorry but that does not work in this case, as they have no basis on which to prove fault and therefore negligence, or that the premises were in disrepair or defective. The burden falls not on the accused but the accuser. As such causes are rarely insured, the pay out by insurer indicates it is unlikely that these are the causes.

The underlying issue is that the landlord via the agent or manco insures and as a simple commercial reality there is an excess. This is in turn is a cost of insuring and therefore service charge recoverable. They have the option if they can prove it ( the above) to recharge the excess to the offending flat.

The OP remedy is then as posted in July.

[nobody]

This is my view, Depends on the damage this being proof of negligence, Since its your floor thats been damaged it could of be considered your fault if its near a water supply inside your flat, A photograph of the above flat overflow and running down your wall would be great,

If proof of the damage is because of negligence from the above flat is rock solid you have no duty to pay the excess, The issue is between the above flat and the management co.

The insurance claim resulted from the flat above you, Its bang out of line asking you to pay period and I wouldnt be happy to say the least.

The management co should persue the flat above you if they decide to not charge the excess to the service charge.

It depends on proof if you decide to challenge these charges via the LVT but if you have proof or the management co dosnt argue who is to blame in writing I would write to them stating how you have been ripped off and ask them to do the right thing and consider applying to the LVT just in principle assuming now you have paid you get fobbed off.

It may cost £70 to apply to the LVT via a written application I would if I had proof of negligence.