ARMA A S K T HE P R O F E S S I O N A L S
ARMA SURGERY Bruce MAunder TAylor, a chartered
surveyor and member of ARMA’s council provides answers to readers’ questions
CLAIM FOR WATER DAMAGE
QUESTION I live on the second floor of our block of flats and my washing machine overflowed while I was at work causing damage to the flat below. An insurance claim has been made by the managing agent but I have been told that there is a £1,000 excess and I will have to pay the lessee of the flat below that amount as it is only the sum over and above that which will be paid by the insurance company. I don’t have that sort of money and it’s going to cause me great hardship. What can I do? ANSWER The buildings insurance policy on a block
of flats normally covers water damage subject to the insured party (usually the landlord or the management company) paying the first amount of any claim, called the excess, and the insurance company paying only for the amount of damage which is more than the excess. Water damage claims are probably the most persistent claims from which insurance companies suffer when insuring blocks of flats (see also page 23). I have not seen a copy of your lease but, assuming it has relatively standard terms, then it is the obligation of your landlord or management company to insure the building. It is unlikely that the lease has any clause about that obligation being subject to an excess, or who pays the excess when one arises. There is probably a landlord or management company obligation to reinstate the damage with the money received from the insurance company. If that money received is less than the cost of the works there will be a deficiency, and it is likely to be about £1,000. The question is who pays? The landlord’s repairing obligation is probably limited to the structure, exterior and common parts/common services. It is therefore unlikely that remedy of the damage falls to them. The repairing obligation of each lessee is probably to repair their own plasterwork, flooring, decorative finishes etc. Your downstairs flat therefore has the repairing obligation for the damage within their flat. There is unlikely to be a clause which obliges you to pay towards the cost of repairing the downstairs flat. It is unlikely that the managing agent or the landlord (or RMC/ RTMCo) can oblige you to compensate the downstairs flat unless you have some unusual clause in your lease to that effect. The downstairs flat might try to claim the money from you in a Small Claims Court, or might try to use what is called the mutual enforcement clause to insist that the landlord (or RMCo) takes action against you.
If there is persistent leakage then action can certainly be taken against you under the normal nuisance clause, but if this is a one off event and you properly remedy whatever fault occurred with your washing machine then there is no continuing nuisance over which action can be taken. For most leases this is a very difficult problem for which few modern leases make adequate provision. Old leases generally make no provision at all for such problems. When you have two owner occupiers who recognise that they have
Water damage claims are probably the most persistent claims from which insurance companies suffer when insuring blocks of flats
The Association of Residential Managing Agents (ARMA) is a trade association for firms that manage private residential leasehold blocks of flats in England & Wales. ARMA promotes high standards of leasehold management by providing advice, training and guidance to its member firms of managing agents. ARMA also produces guidance materials for leaseholders and Residents Management Companies. With over 270 firms in membership, ARMA also campaigns for improvements in the legislation governing the leasehold sector.
36
Summer 2012
Flat Living
