Thousands of home owners up and down the country, but mainly in the north, in the last few weeks are facing the devastating effects of flood damage to their properties. But, what will it mean for landlords and tenants?
The responsibility for flood damage in rental property is not clear cut and one that most landlords are not really prepared for.
The Landlord and Tenant Act 1985 which deals with repair issues requires landlords to keep rented accommodation in a reasonable state of repair. This obviously includes making repairs to the property caused by flooding.
Minor damage after flooding might be unsightly but does not necessarily require repair work unless is directly affects the habitability of the property. Carpets, floor coverings, white goods and other furniture and furnishings may well be ruined and need replacement. In some cases wall plaster may need replacing and the electrical system will probably need attention
Whether or not a tenant needs to vacate will depend on the severity of the damage: when damage is minor there may not be a need to move out but the landlord has responsibility for the tenants’ safety in the meantime.
If the property is still inhabitable and the repair time is within a reasonable time, the landlord is not obligated to find alternative accommodation. However, where the landlord’s insurance policy covers temporary alternative housing then it may be in the landlord’s interest to temporary rehouse. He would continue to accept rent from the tenants while the insurers would cover the expenses of re-housing.
Where the flood damage is severe and many months are needed to do the repairs, it may be necessary to terminate the tenancy and ask the tenant/s to seek alternative accommodation. Mutually terminating may be the best solution for all concerned, though in areas of severe flooding it may be difficult for the tenants to find themselves alternatives.
Landlords should check the wording of their tenancy agreement as most will stipulate that in the event of the property becoming uninhabitable due to fire or flood, then it is terminated. In such a case it is the tenant/s who is responsible for finding alternative accommodation.
As far as re-housing by the local council, any tenant made homeless in these circumstances will be a classed as “priority need”, and will be at least eligible for council provided emergency accommodation.
As everyone knows, insurance is expensive and flood damage insurance, unless it is in a low risk location, is very expensive. Many home owners and landlords are going without flood damage cover for precisely this reason.
Flood-Re (or flood re-insurance) is a scheme agreed between UK insurers and the Government to develop a not-for-profit company – Flood Re – to allow insurers to pass the flood risk element of a home insurance policy into a fund that will pay any subsequent flood claim. It is designed to enable high flood risk households to obtain affordably priced flood insurance by applying a levy to all home policy owners to pay for the scheme.
Flood Re is designed to provide support to homeowners (not businesses) who without it are most likely to face problems in obtaining affordable flood insurance. But homes built after 1 January 2009 will not be covered – this is to avoid incentivising unwise building in known high flood risk areas.
Unfortunately for landlords, all commercial properties, and that includes in this case residential rental properties operated as businesses, will not be included.
Leasehold blocks with three residential units or less will be eligible for Flood Re providing the freeholder responsible for purchasing the buildings insurance lives in the block and the building meets the other required eligibility criteria.
Consequently the following properties will be excluded from Flood Re cover:
- all commercial or business property; n all residential property built since 2009;
- all residential property in council tax bands B and H and above;
- all buy-to-let properties where the landlord arranges the buildings insurance; and
- blocks of flats and converted properties which do not fall into the narrow criteria referred to above.
The Government Flood-Re scheme is expected to be in operation from summer 2016.
Following the recent floods in the north of England, the Arbon Trust – a fundraising initiative of National Federation of Property Professionals (NFoPP) – is putting up £10,000 to help support past and present members of NAEA, ARLA, ICBA, NAVA and APIP facing severe financial difficulties in their businesses as a result of the impact of floods on their homes.
According to a recent Met Office announcement the December 2015 floods in the north broke the record for the wettest month since records began in 1910. Parts of Scotland, Northern Ireland, northern England and western Wales have been the worst hit, where over double the normal December rain fell.
Landlord Flood Insurance & Flood Damage – https://t.co/NzzvjjY5TV
— LandlordZONE (@LandlordZONE) January 22, 2016