Deposit Deduction for Increased Insurance Premium/Excess for claim for tenant damage?

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  • Deposit Deduction for Increased Insurance Premium/Excess for claim for tenant damage?

    UK AST expiring soon - Tenant caused water escape - Building manager made insurance claim (still in process) for damage to flats below.

    The building's insurance premium has gone up considerably as a result (as had the 'Excess' for future claims).

    Can I deduct from the Deposit for this?

    Or can I deduct for the cost of rectifying the damage caused to the flats below (and contribute to the building's fund, i.e. I expect the insurance to pay for most of the damage)

    Can I also deduct for my time spent on dealing with the tenant's damage (at a reasonable hourly rate)?

    Thanks!


  • Lawcruncher
    replied
    Originally posted by DPT57 View Post
    Does that mean that its not in the landlords interest to have a clause in the TA promising to insure?
    It is not recommended in any event for short term residential tenancies. Generally speaking, if a landlord agrees to do something and does not do it the landlord is liable for any loss the tenant suffers as a result.

    Where the landlord insures, any obligation on the tenant to repair should exclude damage by an insured risk unless the insurer witholds payment on account of some act of the tenant. That means that the tenant should be covered for any accidental damage through negligence just as an owner-occupier would be. The tenant should be liable for deliberate damage.

    What the tenant is liable for here depends on the precise terms of the tenancy. It is doubful whether the clause "not to do or suffer to be done anything whatsoever whereby the rate or premium for any insurance of the Premises may be increased" applies. There is an argument that it is the claim which has increased the premium.

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  • KTC
    replied
    Originally posted by DPT57 View Post
    Does that mean that its not in the landlords interest to have a clause in the TA promising to insure?
    What benefit would you have in removing it unless you hate your prospective tenants or are the insurer.

    Leave a comment:


  • JK0
    replied
    Originally posted by DPT57 View Post
    Does that mean that its not in the landlords interest to have a clause in the TA promising to insure?
    Ha ha. It would seem so.

    Just had a look at mine. It says:
    • To keep the Property insured against loss or damage by fire and such other risks as are normally covered by a policy of household insurance, damage caused by the bursting or overflowing of water tanks, apparatus or pipes, third party liability in such terms as the Landlord or his Agents may consider appropriate and such other risks as the Landlord or his Agents may from time to time consider it appropriate to insure against

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  • DPT57
    replied
    Does that mean that its not in the landlords interest to have a clause in the TA promising to insure?

    Leave a comment:


  • JK0
    replied
    Originally posted by KTC View Post
    However, if A and B have a contractual agreement for B to have that insurance in the first place, then B no longer have a claim against A for the loss sustained, and in turn the insurer don't have a subrogated claim against A for its payout.
    But we don't know what was in the tenancy agreement about that. (See what you mentioned below.)

    Originally posted by KTC View Post
    If you can prove tenant were at fault, then you may have a case for recovery of the excess in this claim, and any extra cost you incurred that's not covered by the insurance. Doubt you have a claim on future insurance cost.
    Also, the usual tenancy terms regarding insurance in tenancy agreements are to protect others against things landlord has done, or that happen as acts of God. They aren't there to protect the tenant against being charged for carelessly damaging things, or there would be no point in taking a deposit in the first place.

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  • KTC
    replied
    Generally, if A is at fault for B's losses. B has a claim against A to recover the loss. If B has insurance, and make claim on that insurance to cover its loss, the insurer can then sue A in B's name to recover the payout they made to B. However, if A and B have a contractual agreement for B to have that insurance in the first place, then B no longer have a claim against A for the loss sustained, and in turn the insurer don't have a subrogated claim against A for its payout.

    Leave a comment:


  • JK0
    replied
    Originally posted by leaseholder64 View Post
    If both parties are insured under the same policy, I don't think the insurers will try and apportion blame between them.
    But they wouldn't be. Only o/p is insured by the same insurer as the other lessees. O/p's tenant should have some sort of cover for his own belongings, and for any damage he does to anyone else's.

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  • leaseholder64
    replied
    If both parties are insured under the same policy, I don't think the insurers will try and apportion blame between them. It would be the contents insurers that might go up against the public liability cover.

    Leave a comment:


  • JK0
    replied
    Hmm. If o/p's tenant had proper liability cover, the neighbours (or their insurers) would all be claiming against that insurance, wouldn't they?

    Therefore, I don't think tenant should get any of his deposit back, and you should put it in the service charge pot for any uninsured loses/ excesses.

    Leave a comment:


  • leaseholder64
    replied
    In my lease, many, but not all, covenants are made with both the freeholder and the other leaseholders, so a leaseholder would be able to enforce them (although not by forfeiture).

    The general expectation is that the freeholder insures the building, and the leaseholder the contents, so, if a ceiling comes down, it would be the freeholder's insurance, but if a rug got damaged, it would be the leaseholder's

    Blocks of flats insurance generally notes the interest of leaseholders, and the there is an LPE1 question that specifically asks this, and if you answer no, the buyer's solicitor is likely to ask the freeholder to explicitly note their interest.

    The reality, for escape of water in flats, is in the long run it probably costs you more to insure than it would to pay for all the repairs yourself. It is only for unusual, expensive, items, that you are likely to end up better off making the claim. For small claims, the insurers will more than recover the cost in increased premiums.

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  • jpkeates
    replied
    The freeholder (or their management company) is the only person who can enforce a lease clause, you can't rely on the clause as another leaseholder. So the freeholder would pursue you for the breach (and probably won't).

    Unless the tenancy agreement had the same term, it has no impact on your tenant.

    Making any claim will typically cause an increase in policy costs, proving how much was due to the type of claim will be difficult (not least because the insurance company won't be able to tell you).

    Your tenancy agreement will hopefully say what you can claim against the deposit for.
    Otherwise you're simply claiming money from the tenant based on whatever you think is reasonable - and the deposit is just the same as any other money the tenant might have.
    There's nothing magic about a tenancy deposit, it's just the tenant's money being held by the landlord to be used in line with tenancy agreement.

    I don't think you have much of a claim.

    I don't think that the management company had any need to use the buildings insurance at all, the individual lessees should have used their own insurance to pay for the damage.
    That's why the properties have to be insured - it's what insurance is for.

    Alternatively, the owners of the damaged flats could show negligence and that the damage was reasonably forseeable, which they might have been able to, based on your tenant's explanation.
    Then they could have claimed from you or your tenant.

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  • joconno2
    replied
    Thank you very much for responses. Tenant has admitted escape was his fault (he left shower head running outside bath!).

    The lease indeed obliges me to insure the premises but also provides that Tenant will: "not to do or suffer to be done anything whatsoever whereby the rate or premium for any insurance of the Premises may be increased".

    The insurance broker cited the claim as the reason for the increased premium.....

    Leave a comment:


  • buzzard1994
    replied
    The legal principle for recovering losses is that they have to be forseeable. One difficultly you will face is showing that any future increases were a result of this claim and not increases that would have taken place anyway. If you can get your insurer to give you something saying what part of the increase is due to the claim you might have a slight chance. Alternatively you could try a claim for part of the increased cost using average increases in premiums or a quote obtaining without mentioning the claim.

    No chance whatsoever of claiming for your time.

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  • KTC
    replied
    If the building insurance you're claiming off is required as part of the tenancy agreement (typically landlord's obligation - building insurance; tenant's obligation - content insurance for example), then the insurance policy is there for both your benefit. You are required to claim from the insurance for payout over something that's covered by the policy, and the insurer do not have a subrogated claim against the tenant to recover the money paid out.

    If you can prove tenant were at fault, then you may have a case for recovery of the excess in this claim, and any extra cost you incurred that's not covered by the insurance. Doubt you have a claim on future insurance cost.

    Leave a comment:

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