Freehold in Company – Outvoted on decisions

Surely it depends on who represents the company with the insurers? I had exactly the same situation as you 18 months ago and our building insurance paid (for the damage to the flat below, not to fix the leak itself).

You are not liable to repair the damage to the property beneath yours, unless it was caused by negligence (e.g. someone left a tap running) and not an accident (e.g. damaged pipework).

I agree with Mandy. The insurance is for the benefit on all the occupiers and I don't think you can be prevented from making a claim.

What are the others worried about - is there some type of no claims discount?

Assuming that the insurers are willing to pay I think that you should simply say that you pay for insurance for exactly this sort of eventuality and you are not prepared to pay for it personally.

Perhaps also sketch a scenario where one of the others has a fire which damages all three flats and ask if the owner of the flat concerned would be happy to pay for the damage to the other 2?

Whether the buildings insurance should be used to cover it or not may depend on the conditions in your lease, so get it out and read it carefully.

My reading of our leases (in a similar freehold situation) is that the company is responsible for the structures between the floor and ceilings but the leaseholders are responsible for the floors and ceilings themselves, and to damage caused to another flat by a problem arising within the leaseholder's flat. If the lessor (the company) has to take action to rectify a problem, it may claim reimbursement for any consequential loss (which could arguably include increased insurance premiums) from the responsible lessee.

Does your landlord's contents insurance not contain provision to cover damage to third party properties?

By the way, our buildings insurance broker also recently confirmed that they would only take an instruction for a claim from the directors named on the policy.

Reply to the comment left by "Steve Hards" at "12/03/2016 - 13:38":

Typically, landlord insurance for leaseholder landlords simply covers the fixtures and fittings in the property and any furniture belonging to the landlord (mine is certainly limited in this way).

When I had the leak in my bathroom, I contacted my landlord insurance provider, Direct Line, and they made it clear that this was something I needed to claim for under the freeholder's buildings insurance.

Thank you all for your responses. I believe that I should be able to claim under the insurance policy, as the no claims bonus will be lost, the other two directors voted against me claiming under the insurance. As a result, I have not been able to contact the insurance company.

Has anyone got any experience on the next steps that can be taken so this claim can be made via the insurance even though the other directors are being "unreasonable"?

Thanks

Reply to the comment left by "Theo Steve" at "22/03/2016 - 13:38":

Hi Theo - it was nice to meet you the other day. Sorry to learn you're still having this issue.

Steve Hards has made a very good point above - what does your lease state, both about who is responsible for the structures between the flats, and whether it makes any mention of claiming under the freehold insurance?

Another suggestion - contact your insurance broker or insurers, and ask them if you would be within your rights to override your fellow directors. Most insurance brokers are very knowledgeable about the industry and may have come across this situation before.

I started to reply to you along a different line but have just read your post again, you say the actual damage has already been covered by the insurance? In which case why was the flat downstairs not included in the claim? The actual leak repairs would not be covered by the insurance and as it was in your flat I am afraid that is down to you.

Theo

Again, you are not responsible under common law nor statutory law for repairing the damage to the flat below UNLESS it was due negligence or vandalism. HOWEVER, you need to check the lease as it may contain a clause that waives this normal legal protection - I'm most certainly no expert on leasehold law, but the fact that the lease ought to have been drawn up by a specialist solicitor, then subsequently checked by other conveyancing solicitors each time your flat changed hands, would suggest you can rely on it. But your conveyancer would have had a legal duty to make you aware of any such clause...

Hi Mandy, it was good to meet you at the Landlord Law workshop the other week 🙂

This question has been bugging me so I went back to our block insurance agent for their opinion should it happen to us.

From their response it appears that my comment above was rather too pessimistic. They said "As with all insurance policies the actual repair of the leak is not covered, but the resultant water damage would be and any work necessary to trace and access the source of the leak if for instance it is buried in a concrete floor or in a wall."

In our particular policy we have a £100 claims excess, and as regards prejudicing future premiums, they said that (for us, obviously) "There haven't been any claims made in recent years so a 'one-off' claim should not affect the premium to any great extent."

Possibly, if Theo, who raised the original issue of being outvoted by the other directors, approached the insurance company they may be able to reassure the other directors that a claim may not have the negative consequences they are worried about.