Rental Homes Brownsburg Indiana

With Landlord Insurance Coverage Who Pays For Water Damage Within A Block Of Rental Properties?

What occurs if a landlord features a issue of a major water leak within a rental home? Visualize the buy-to-let home in query was a top rated floor flat. The result was that harm had not merely been brought on to the carpet in their flat but additionally to the carpet with the tenanted flat below. Along with the carpet, the ceiling inside the flat below had also been damaged resulting inside the plaster bubbling up and falling off.

The home investor who owned the downstairs flat, the landlord was told by him that the structural harm to the flat below was covered by their buildings insurance coverage but meeting the cost of a new carpet could be the upstairs landlord’s responsibility.

Who truly is responsible for the repairs and which landlords insurance coverage policy must be claimed against?

Legal responsibilities with the landlord
Firstly before finding into the facts with the Landlord Insurance policy a landlord must be clear about their responsibility for maintenance of their buy-to-let home under the terms of any tenancy agreement.

Probably the most essential pieces of legislation governing repairs is that contained within Section 11 with the Landlord & Tenant Act 1985 and which applies to leases or tenancy agreement granted on or after 24th October 1961 for less than seven years.

The vast majority of Assured Shorthold Tenancy Agreements are periodic or for terms of less than seven years and therefore Section 11 applies to these tenancy agreements.

The landlords implied obligations under Section 11 are:

* To keep in repair the structure and exterior with the dwelling (including drains, gutters and external pipes) to fulfil the tenancy agreement.
* To keep in repair and proper working order the installations inside the dwelling for the supply of water, gas, electricity and sanitation (including basins, sinks, baths and sanitary conveniences) to fulfil the tenancy agreement.
* To keep in repair and proper working order the installations inside the dwelling for room and water heating to fulfil the tenancy agreement.
Inside the example given above the landlord could be responsible for the repair with the ceiling as it is part with the structure with the building. The reality is that the ultimate responsibility may not lie using the owner with the leasehold flat. This is because the landlord themselves may only be a leaseholder and it could effectively be that it is their landlord, the freeholder or any appointed management company that will ultimately be responsible for carrying out the repair work.

Under s.11(2) with the Landlord & Tenant Act 1985 the landlord is not responsible for works or repairs for things which the tenant features a duty to use in a tenant-like manner such as carpets or decoration. However, the exact responsibilities may be set out in any explicit terms contained within the Assured Shorthold Tenancy Agreement. Therefore, unless otherwise stated inside the Tenancy Agreement; if the water harm resulted inside the carpet or decoration becoming shabby it is the tenant who is responsible for the repair. The reality though is that when faced with a shabby home and an uncooperative landlord most tenants will ultimately give notice and leave.

Who pays?
The next step for the landlord is to establish who pays for the repairs in both flats.
For a start any landlord insurance coverage on the (upstairs flat) will only cover harm to the landlords flat unless there is block insurance coverage scheme in place. This is likely to be the case where a freeholder and a management company exist who arrange the building insurance coverage for the entire residential block and then recharge each leaseholder for their share with the insurance coverage costs.

Contents insurance coverage is the responsibility with the individual flat owner or leaseholder. Therefore, providing the landlord has contents cover they will probably be able to claim against the harm brought on to the carpet in their top rated floor flat. The landlord is likely to have liability cover included in their buy-to-let insurance coverage policy, but this is only if it can be proved that they were legally negligent.

This means that under the scenario under discussion, the only way the landlord with the upstairs flat would have been legally negligent is if the downstairs flat owner “officially” warned the top rated floor landlord that they had a leak (or something that may cause a potential leak) that could harm the downstairs flat. Then, following this, the top rated floor landlord ignored this warning and then the leak occurred. In practice, there is almost no chance of this happening as by the time a leak is discovered, the likelihood is that the harm has already been brought on. This is therefore classed as an accident as far as the buy-to-let insurer is concerned and therefore would not be the top rated floor landlord’s fault.

Therefore, the home investor who owns the downstairs flat has several options. Firstly, depending on the terms with the tenancy they could insist on their tenant paying for the repair. The tenant if insured could claim on their contents insurance coverage. It may effectively be that the insurance coverage company that provides the buildings cover also consists of cover for floor coverings such as carpets within the policy. This is the case under the policy provided by Alan Boswell’s Insurance.

Therefore, where a residential block insurance coverage policy is in place the costs of both carpets could possibly be claimed for together along with the costs of repair to the ceiling. This would have the benefit for both landlords of not having to get into an argument using the tenant about who is responsible for the costs and then for one of the parties to have to make a separate claim.

Where this extent of cover is not in place then the home investor may decide to claim off their own buy-to-let insurance coverage. In this case the home investor and owner with the downstairs flat is not likely to be happy, but it is down to them to pursue their insurer for further advice. Their insurer could ultimately pursue the top rated floor landlord’s buy-to-let insurer under the negligence clause. The reality is unless the amounts are large and the case clear cut that it is very unlikely to happen. Landlords need to always remember that a conciliatory approach is likely to produce a more effective long-term solution than an aggressive confrontational one.

For more information check out Landlord Insurance
T&H Realty Services — 46 W. Main St.