Insurance excess-AST says tenant is responsible for excess

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    Insurance excess-AST says tenant is responsible for excess

    My daughter wants to rent a property but the AST states that the tenant is responsible for the excess re: any claims the landlord might make against his buildings insurance. [/B] It doesn't specifically say that he has that right only IF the claim is for damage caused by her neglect. My daughter has no problem paying the excess if a claim is her fault but not if it's the fault of another flat in the block or a storm etc.

    The landlord won't budge saying if he amends the off-the-shelf AST issued by RLA he won't be able to seek their support/advice should the need arise and he wants to make sure he's covered if she leaves a tap on etc causing damage/insurance claim.

    My question is, can the landlord legally make my daughter pay (or deduct it from her deposit) his buildings insurance excess if the property she rents is damaged through no fault of her own and if she has no control on the level of excess he chooses when buying his insurance. (Excess is currently £100 but has been increased to £500 for escape of water)

    I've been a landlord for years and my AST's state that I can claim the excess IF the damage & subsequent claim was caused by the tenant's negligent behaviour/activity etc but if the claim was due to an insurable event that wasn't the tenant's fault then the excess is my expense, which is perfectly fair.

    She will lose this property if she doesn't sign tomorrow so any urgent advice would be much appreciated.

    #2
    It sounds fairly normal to me.

    Why should a landlord pay an excess if the damage is caused by his tenant's carelessness?

    Where there is damage caused by something failing however it would be fair for the landlord to pay.
    I offer no guarantee that anything I say is correct. wysiwyg

    Comment


      #3
      The OFT guidance says:

      We are likely to object to a term that requires the tenant to meet all or part of
      the excess payable on a building's insurance claim in relation to the property.
      Landlords are under a duty to maintain the structure of the building and this
      risk is their responsibility even though the claim may not arise through their
      fault. This does not mean that tenants are not liable for damages where they
      are at fault, but they should not be required to bear this risk in all instances.
      Similarly we would object to a term making the tenant liable for damage
      done by third parties outside their control, for example, repairs required
      following a burglary or vandalism.

      Comment


        #4
        thank you for quick reply!! My point exactly! My daughter's quite happy to pay if its her fault. My point is that the AST says she has to pay the excess whether its her fault or not. So if something fails, or there's a storm, or the flat below has a fire, or someone forces entry into the property....she still has to pay the excess. My question is that legal? Fair? Unfair Contract Terms Regulations applicable?? I.e. My daughter's happy to be fair but the landlord isn't!

        Any suggestions please??? (He refuses to change the off-the-shelf tenancy)

        Comment


          #5
          Many thanks Lawcruncher!! I wondered if Unfair Contract Terms Regulations would come into play?? My daughter has been caught out before so she is very cautious...but perfectly prepared to accept her responsibilities where they are fair. We're just trying to avoid any potential disputes from the outset! I feel this landlord is being unreasonable??

          Comment


            #6
            Ignoring the UTCCR, section 11 of LTA 1985 comes into play. Basically the section says (a) the landlord is responsible for repairs to the structure and water and space heating and sanitary installations and (b) any covenant by the tenant to repair or reimburse the landlord the cost of anything the Act makes the landlord's responsibility is of no effect. Accordingly, if the damage is to any such part or installation the landlord cannot claim any excess from the tenant. The position is different in respect of any part not covered by the section and the Act cannot be relied upon and so you have to rely on the UTTCR, as to which see above. The Regulations are less certain in their application than the Act. Whilst a County Court judge may have regard to the OFT's guidelines he is not bound by them. One would hope that any ADR assessor would feel bound to follow the guidelines. To what extent it is reasonable to expect a tenant to contribute to any excess is a matter of opinion, but I am inclined to think that the risk ought to lie with the landlord.

            You make the important point that, even if the law is on the tenant's side, it is best to resist a provision which seeks to pass the risk to the tenant as it can lead to argument.

            For the record, as I think you are aware, if the damage, whether to a part for which the landlord has responsibility or not, is caused by the wilful or reckless act of the tenant the landlord can look to the tenant to make good any loss not covered by his insurance.

            Comment


              #7
              I wonder whether it might be worth OP's daughter asking to speak to the LL directly about it since the LL probably doesn't even realise there is this ridiculous clause in the contract, if he has left it all to the agent. If he is a reasonable man he will see the sense of your argument.

              I suppose market forces will rule and if the A has a queue of Ts beating a path to the door of the property, he will have the luxury of being able to let it to the first suitable T who is willing to sign up to the clause, and let OP's daughter go.

              But it's worth a try.
              'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

              Comment


                #8
                Thank you 'mind the gap'. We've tried that. The landlord is dealing with it himself-no agent. Says his mother has 40 yrs landlord experience and he has 10yrs and they've never had this issue re: their tenancy agreement raised before. Strange because in my 20yrs as a landlord I've never known such a clause and his handling of the matter strikes me as quite unprofessional. He only sees the sense in his argument not my daughters. So far she's the only applicant because she was 1st applicant and they suspended viewings immediately. It would get snapped up though...people in our neck of the woods just sign rather than read what they're signing. He has stated in an email that he would hope fairness, common sense and reasonableness would prevail should an insurance claim/excess occur so we would refer to that as well as the Act & UTCCR. I'm just amazed that this landlord can't see the sense in perfecting his tenancy and seeing it as a positive thing. Thank you for your assistance!

                Comment


                  #9
                  Many thks Lawcruncher! Since the landlord won't budge and my daughter really wants to rent this property (there's a shortage of residential rentals in the area) I expect she'll proceed but with the information you've provided to refer to should the need arise.....as well as the landlord's email in which he states that he would hope fairness and common sense would prevail in the event of an insurance excess liability dispute. Many thanks!

                  Comment


                    #10
                    Since AST is app RLA standrda surely dau could contact RLA for clarification?
                    Poss LL is using outdated which RLA is unable to defend

                    Comment


                      #11
                      Hang on - OP, have you actually read the wording in question?

                      The following is the relevant clause from the standard 'off-the-shelf' RLA AST agreement.

                      ...we may take from your deposit:
                      the reasonable cost of making good or compensating us for any damage to the property or the furniture or fixtures or anything else for which you may be responsible which is not caused by fair wear and tear. This does not include any damage covered by our insurance policy (except for any insurance excess) or any damage resulting from our failure to carry out any repairs for which we are responsible. We will make allowance for the age and condition of any item as at the start of the tenancy


                      What I take this to mean is that that if the tenant damages the property eg by generating £2000 of repairs by leaving a tap running, then what will happen is that the landlord's insurance will cover that cost except for the insurance excess, which the tenant will be responsible for paying.

                      Which to my mind is actually a pretty fair clause, no?

                      Comment


                        #12
                        That does indeed seem to indemnify the T except for damage caused by act or omission of the T, and then limited to the amount of the excess where the damage is insured. Well spotted, Eric! OP, is this the RLA agreement used by the LL in question?

                        In practice however, damage caused by T's act or omission (as opposed to the forces of nature) is often not insured, when push comes to shove. The classic examples are flood damage caused by burst pipes if T leaves the property unheated in winter*, or theft and damage to f & f if T leaves the property unsecured and it is broken into. But if OP's daughter is a careful T, as I am sure she will be, the problem shouldn't arise.

                        (*The LL of the student house next door to ours discovered this to his cost. He had asked the Ts to put the heating on the frost setting when they went home for Christmas; they forgot. The pipes burst, and water seeped out for three weeks. Total refurb needed (walls, ceilings, carpets, the lot)...his insurance would not pay out. He ended up paying for it all himself, as he judged the students weren't worth pursuing).

                        The 'running tap' example is an interesting one - I think most insurance companies would pay out on this one (ours did, when Son2 left the bath to run over!) but if they wanted to be pedantic I suppose leaving a tap running is 'an omission' (she omitted to turn it off!). I suspect that increasingly they will be getting pickier about these things.
                        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                        Comment


                          #13
                          I'm an £8 RLA member & have just downloaded their current AST & the wording matches.

                          OP/jsb... I would be very inclined to advise daughter to go ahead & sign if she wants the place. I think the attempt by wicked & evil landlord to charge insurance excess to innoccent & defenceless daughter will fail as the only way LL can get the £££ is if..
                          a) LL sends T bill & T pays (she should not..)
                          b) It is handled as a deposit dispute by deposit scheme (Don't think adjudicators will side with LL..)
                          c) Through small-claims court route - which I doubt LL will bother with over such a small sum: Unless he suing for a whole lot more (eg other damage, unpaid rent etc etc so might as well pile the insurance excess in also..)
                          d) The unlikely event OFT guidelines etc... are revised in LL favour

                          The agreement also has stuff about recovering unpaid utility bills from deposit & I'm d*mn*d sure that won't work either,,,

                          Tenant never really knows if Landlord trustyworthy before they finally leave & everything settled....

                          Equally, Landlord never really knows if tenant trustyworthy before they finally leave & everything settled....

                          Agents ?? Ah, well...

                          Cheers!

                          PS RLA agreement still has the option of having rent payable every 4 weeks: Very unwise... (for the Landlord..)
                          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                          Comment


                            #14
                            Thks MTG. Yes it is the RLA agreement that Lawcruncher refers to. And I agree re insurer's reluctance to pay out on claims where T (or owner occupier) is at fault. I had a claim yrs ago when Ts washing machine was faulty = leak = damage that our insurer wouldn't pay out for because appliance belonged to T rather than LL and it wasn't therefore included in the rental agreement so T was at fault but I paid for the damage because T was a good T and I learnt a lesson.....get copy of Ts contents insurance & ensure they renew!

                            I read the clause in this RLA AST over and over again each time trying to get it to mean what I wanted it to mean...i.e. what you and lawcruncher are suggesting but each time it seemed to be saying:

                            1.T is responsible for making good damage that they're responsible for. (=fair)
                            2.T isn't responsible for any damage covered by the LLs insurance or any damage caused by the LLs failure to maintain/repair. (=fair)
                            3.Although T isn't responsible for damage covered by the LLs insurance or failure to repair, T is responsible for 'any insurance excess'. (=unfair)

                            Point 3 seems to imply that T is responsible for ANY insurance excess arising out of ANY claim for damage covered by LLs insurance policy regardless of fault. If that statement only applies to claims which are Ts fault then clearly that is fair but if it applies to ANY claim then it isn't...and that's the crux of my query.

                            My own tenancy is far more comprehensive and makes it clear that the tenant will only be responsible where they are negligent and it spells that out. Any 'off-the-shelf agreement can be amended to clarify or perfect clauses and the RLA will honour their commitment to support their member LLs as long as any addendum has been approved by them. It seems in my daughter's case the LL doesn't know this, won't believe it and/or can't be bothered! On the basis of the info provided in everybody's replies I'll advise my daughter to sign in the knowledge we're armed with a defence should a dispute arise.

                            Many thanks!!!

                            Comment


                              #15
                              Thks Mariner! RLA won't discuss with daughter or myself because we're not members! To be honest the RLA AST appears outdated and flimsy....there's no way I'd use it! If it is outdated/flimsy then that's in my daughter's favour....I've tried to help the LL by pointing out it's failings for his benefit but if he chooses to ignore that then ...silly landlord! My tenancy has evolved over the years....as I learn from an experience and/or as legislation etc change, I amend my tenancy to make sure as much as possible is covered...makes sense to avoid potential disputes!

                              Comment

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