Indemnity insurance claim on contractor, surveyor or managing agent?

Indemnity insurance claim on contractor, surveyor or managing agent?

0:00 AM, 13th May 2024, About 6 months ago 3

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Hi everyone, I own a leasehold flat in a building (total 5 flats) and I also own a share of the freehold.

We appointed a contractor via our managing agent to carry out major external works in the building including to the roof, electric writing, water pipes etc. This work was being overseen by a surveyor, also appointed by the managing agent.

The problem is that the contractor has defaulted on the remaining 30% of the major work due to poor health and given the awful state of the building, the managing agent is suggesting we appoint a new contractor to finish off the work. This however comes at an extra cost of nearly 50% more.

What can be done in this situation?

Can we call on the contractor’s insurance (for default), the surveyor’s insurance (for negligence) or the managing agent’s professional indemnity insurance (for not lodging a successful insurance claim on our behalf)? This is a lot of money and 2/3rd of the leaseholders can’t pay up due to lack of funds.

Is there anything else we can do?

Apparently, the defaulting contractor is doing ad-hoc work for other parties. Would a claim with the defaulting contractor’s insurance company also incriminate the surveyor?

Do we have any other options?

Many thanks

Seu


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Lucerne Torquay

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10:43 AM, 13th May 2024, About 6 months ago

Have you got a stage payment contract....?

Judith Wordsworth

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11:05 AM, 13th May 2024, About 6 months ago

Small claims court for breach of contract against the contractor.

Depending on the amount of money involved might be able to go Money Claim Online.

Who signed the contract the joint freeholders (ie yourselves) or your managing agent?

Wyn Burgess

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9:36 AM, 19th May 2024, About 6 months ago

Assuming it is a JCT Minor Works contract there are provisions for engaging an alternative contractor and any extra over cost is payable by the original contractor. Obviously if the original contractor won't pay then a contractual dispute arises. Key is that payments to the contractor are for work carried out so there is money left for the outstanding tasks but in this situation the balance of the contract sum may not be enough with another contractor.

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