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  • Property-a-holics

    Leak - who pays for the various damage?

    Hi

    I really hope someone can help.  I own a BTL top floor flat which had a leak recently, which affected the next door and downstairs neighbours.  The block does have building insurance but the excess is £500.

    The neighbours are asking me to pay for all the plumbing call-outs totalling £400 (not covered by building insurance) and will be coming back to me with regards to the building damage etc, which is covered by building insurance but Freeholder has advised all parties concerned that the excess will be deducted from the claim and the neighbours will have to pursue me for the excess amount.

    While I realised that the leak originated from my flat, is it standard practice to expect me to cover all the plumbing costs?  With regards to the damage, I think I should wait and see what the bill is before deciding whether I should ask the neighbours to claim from the Freeholder or for me to pay them directly.  But even so, £500 excess is a lot.

    Are there any solicitors here who can offer a few words of advice? Or can anyone let me know how best to approach this?

    Many thanks!

    A

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    Basic logic suggests that damage to other properties caused by your leak would be recoverable from you - either directly by the other owners - or by their insurers - which would include their aggregate excesses

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    Thank you for your speedy response.  Yes, I appreciate that I have to contribute towards the damage caused by the leak but I feel like I'm in a vulnerable position whereby I cannot buy any type of insurance to protect myself against these situations.  So wanted to check if that is really the case.


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    You would be liable to pay for this excess. But I would have thought it was covered under just one excess as its one claim or are the freeholders asking you to pay 3 lots of excess which is hefty bill. Not sure you can get any insurance cover for this sort of thing. You may want to find out what the cost will be get the works done before you agree anything.


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    Thank you Bolton Landlady.  As it has affected 2 flats, I'm guessing they will be counted as 2 separate building insurance claims.  This has put me right off buying flats as an investment.  Yes, I'll find out the total works cost before any agreement.


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    Even though its affected 2 properties it was a consequence on 1 incident, I think it would be 1 claim. Maybe worth checking. Make sure the neighbour doesn't put in a separate claim but gets everything done under one incident. 

    I would think the cost of the repair would far exceed the excess.

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    I would expect them to be treated as one claim.

    There is an argument that the excess should be paid out of the service charge account on the basis that the excess is set at the level that it is to achieve a lower premium.  May also be worth checking the lease as this may also set out if insurance does not cover all repairs.

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    Afternoon Jellybeans99

    These things, as always, can be complicated and without all the facts it can be difficult to give clear and meaningful advice. However we've had a go! Overall comments below and then we've added some specific comments to your email below.

    • The lease will show who is responsible for paying the policy excess. Alternatively, if there is no clear instruction in the lease, it should be shared equally amongst the affected flats (unless there is proven negligence then you could argue that flat owner where the leak originated should be responsible for paying this).
    • One excess should apply as one incident.
    • Flat owners are responsible for mitigating damage to their properties, if they have instructed plumbers for this reason, the cost should be borne by them (some policies will cover trace and access). Unless there has been negligence and they may have a right of recovery from the flat owner where the leak originated, but they still have to prove negligence.


    "The neighbours are asking me to pay for all the plumbing call-outs totalling £400 (not covered by building insurance) and will be coming back to me with regards to the building damage etc, which is covered by building insurance but Freeholder has advised all parties concerned that the excess will be deducted from the claim and the neighbours will have to pursue me for the excess amount."

    I would suggest that if the neighbours instructed their own plumbers to mitigate damage to their properties, then they would be responsible for these costs unless, that is, you have been negligent; for example you knew there was a leak and did nothing about it. You indicate that the leak was in your flat so I fail to understand why the neighbouring flats have instructed plumbers unless they thought the leak was in their properties, if this is the case, I would expect them to cover these costs themselves as part of the trace and access of the leak (check the policy as some policies will include this cost as part of the claim). The repair to the damaged pipe would not be covered under the policy unless it had been damaged accidentally (ie. somebody has accidently hammered a nail into it).

    You should check your lease as it should state in there who is responsible for paying the policy excess. If there is no clear instruction in the lease, a solution is to share it equally amongst the affected flats.

    "While I realised that the leak originated from my flat, is it standard practice to expect me to cover all the plumbing costs?"

    Without fully understanding the cause of the leak and where it was located, from the information provided I would expect you to be responsible for plumbing costs which are directly related to your own property.

    "With regards to the damage, I think I should wait and see what the bill is before deciding whether I should ask the neighbours to claim from the Freeholder or for me to pay them directly.  But even so, £500 excess is a lot."

    Large excesses are not unusual and can often keep the premium low. Only one excess should apply as it is a single incident regardless that it has affected more than one flat.

    Hope it helps

    Sharon - Claims Consultant

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