Leaking shower in my leasehold flat

HenryHippo · 11 August 2018 at 5:02PM

Last week my downstairs neighbour alerted me that my shower was leaking and causing her ceiling to sustain damaged.

I bought the flat 2.5 years ago, and she said that it happened "a few years ago... but it was covered under insurance" I own my flat, but the people before me were tenants.

I contacted the Managing Agents, who sent me a copy of the building insurance. I spoke with the Insurers, who advised me that the insurance has a £500 excess, and does not cover the repairs, but does cover Trace and Access. It does cover damage to the flat below me, but that the owner of that flat needs to put in a claim, not me.

Questions from my end:

- Given that there are 2 claims (mine for trace and access, and my neighbors for repair), does that mean both claims have a £500 excess?

- Who pays the excess on each claim? From my point of view, the MA has an obligation in the lease to provide insurance for such things and therefore they should pay the excess. If the leaseholders were obliged to pay the excess, then the MA would just raise the excess to a silly amount and enjoy the cheap premiums, maxing out their profit.

- If I have to pay the excess for the trace and access, is there any point claiming on the insurance for this, given trace and access would probably be less than £500?

eddddy · 12 August 2018 at 12:28AM

HenryHippo wrote: »

Questions from my end:

- Given that there are 2 claims (mine for trace and access, and my neighbors for repair), does that mean both claims have a £500 excess?

It is one incident, so I would expect there to be one excess.

HenryHippo wrote: »

- Who pays the excess on each claim? From my point of view, the MA has an obligation in the lease to provide insurance for such things and therefore they should pay the excess. If the leaseholders were obliged to pay the excess, then the MA would just raise the excess to a silly amount and enjoy the cheap premiums, maxing out their profit.

You've got slightly the wrong perspective.

Managing Agents don't really pay for anything at all, ever.

All they ever do is pay a bill, then reclaim the full amount from the leaseholders.

However, if an insurance claim relates to damage to just one leaseholder's flat, that leaseholder would normally pay the excess.

(But if, for example, the damage was to a communal part of the building, the Managing Agent would probably split the excess across all flats.)

HenryHippo wrote: »

- If I have to pay the excess for the trace and access, is there any point claiming on the insurance for this, given trace and access would probably be less than £500?

As I say, it's likely to be one incident, so just one excess.

It sounds like you and your neighbour are jointly benefiting from the insurance claim, so maybe you should both contribute to the excess.

HenryHippo · 12 August 2018 at 9:26PM

eddddy wrote: »

It is one incident, so I would expect there to be one excess.

You've got slightly the wrong perspective.

Managing Agents don't really pay for anything at all, ever.

All they ever do is pay a bill, then reclaim the full amount from the leaseholders.

However, if an insurance claim relates to damage to just one leaseholder's flat, that leaseholder would normally pay the excess.

(But if, for example, the damage was to a communal part of the building, the Managing Agent would probably split the excess across all flats.)

As I say, it's likely to be one incident, so just one excess.

It sounds like you and your neighbour are jointly benefiting from the insurance claim, so maybe you should both contribute to the excess.

Yes, I'm aware that the MA is funded by the leaseholders thanks. Our MA holds cash reserves in the tens of thousands of pounds, so they wouldn't need to reach out directly to ~50 flats to claim £500

I would feel uncomfortable with my neighbour paying any amount of the excess, it certainly isn't her fault. I'd rather I paid the full amount than we split it, although the MA paying the entire amount would be my preference.

I'm sure that my MA will try to push the excess onto me when it comes to it (easier to ask me to pay it, than to take it out their cash reserves), but has anyone been in a similar situation where the MA (funded by the leaseholders yes) picked up the tab?

eddddy · 13 August 2018 at 6:09AM

The managing agents can only spend the leaseholders' money on things that are stated in the lease.

The managing agents won't have the discretion to pay a buildings insurance excess - unless the lease says they must. Otherwise, the other 50 leaseholders could complain about misuse of their money.

Obviously, you could volunteer to pay your neighbour's excess, if you want.

(All this assumes that the leak wasn't caused by your negligence.)

Edit to add...

You can double-check your lease to see if there is any basis for the Freeholder (Management Company) to pay the excess.

takman · 13 August 2018 at 10:39AM

HenryHippo wrote: »

Yes, I'm aware that the MA is funded by the leaseholders thanks. Our MA holds cash reserves in the tens of thousands of pounds, so they wouldn't need to reach out directly to ~50 flats to claim £500

I would feel uncomfortable with my neighbour paying any amount of the excess, it certainly isn't her fault. I'd rather I paid the full amount than we split it, although the MA paying the entire amount would be my preference.

I'm sure that my MA will try to push the excess onto me when it comes to it (easier to ask me to pay it, than to take it out their cash reserves), but has anyone been in a similar situation where the MA (funded by the leaseholders yes) picked up the tab?

The cash reserves have come from the ~50 flats so you are expecting everyone to pay a bit of the excess including your neighbor.

So you would feel uncomfortable if your neighbor paid any part of the excess but your happy for all the other flats to pay it who are not involved in the issue at all?

Leaking shower in my leasehold flat

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