Does buildings insurance cover damage that existed before I purchased?

by Readers Question

8:11 AM, 27th May 2015
About 4 years ago

Does buildings insurance cover damage that existed before I purchased?

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Does buildings insurance cover damage that existed before I purchased?

Hello all, I will explain in more detail, but first just wanted to say that this site has been a great source of learning for me as I have been planning to build my portfolio and I can’t thank the owners and contributors enough for the knowledge sharing.

Now for my query – I hope you can help.

I have purchased a leasehold flat which had water damage caused by damage to the roof prior to my purchase of the property. I was adviced by my solicitor and the seller’s solicitor that I should be able to claim against the existing buildings insurance for this damage, even though I didn’t own the property myself at the time of the damage… I managed to convince myself that this was true.

After requesting the freeholder to raise the insurance claim, he has informed me that the insurance company has declined the claim as I personally didn’t have a financial interest in the property at the time of the damage. Now, I can also convince myself of this, however I have experience of how lazy the freeholder is, and wouldn’t be surprised if he hasn’t even contacted the insurance company and is just giving me his personal opinion as fact.

What’s your view? Any advice on next steps?

Thanks in advance.

Tony water



Comments

Neil Patterson

8:13 AM, 27th May 2015
About 4 years ago

Hi Tony,

I will get Jason our P118 property expert to comment on this for us 🙂

Jason McClean

9:15 AM, 27th May 2015
About 4 years ago

Hi Tony

The Freeholder is correct, you were not party to the contract of insurance therefore no claim is possible.

You bought the property in the knowledge that there was damage so its a buyer beware situation. The previous owner should have made a claim under his insurance.

The legal advice sounds suspect here. Are they suggesting you pretend the damage occurred after you bought and insured the property yourself? Insurance fraud departments are sophisticated and I am sure would see right through that and refuse you insurance in the future, leading to a whole new world of hurt and expense.

Sorry it is not better news but from the way you word the question, I think you know yourself that this was a long shot as it simply sounds logically wrong, you cannot buy after the event insurance for properties. Hopefully yo can get the damage rectified yourself for a reasonable cost and I do hope you negotiated the price of the property lower to reflect this.

Michael Barnes

16:12 PM, 27th May 2015
About 4 years ago

If you were incorrectly advised by your solicitor, then you may have a claim against him/her

Michael Barnes

16:15 PM, 27th May 2015
About 4 years ago

Reply to the comment left by "Jason McClean" at "27/05/2015 - 09:15":

If thebuilding was properly insured at the time of the damage, then is there no way that a claim can be made by someone?

Jason McClean

16:21 PM, 27th May 2015
About 4 years ago

Hi Michael

The freeholder with the insurance contract should have made the claim at the time.

There is no way you can retrospectively claim for this using landlords insurance. If people could do that they would never buy insurance until after they had a problem and it would be a 100% claim rate and lose money faster than you could count.

Agree, if you have been advised incorrectly you should take the solicitors to task, but that is much easier said than done I suspect.

Ian Ringrose

22:57 PM, 27th May 2015
About 4 years ago

But the former owner may be able to claim and assign the payout to you.

I expect that the two solicitors would wish to make this happen if you put in a formal complaint to your solicitor.

Gary Nock

16:38 PM, 28th May 2015
About 4 years ago

Tony- you mention damage to the roof. Is it the roof or the ceiling to your individual flat? If its the roof then check the lease. It will have the repairing responsibilities of each party. If it's the roof then its a repair which comes out if the service charge. If its your own ceiling then I'm afraid you solicitor should have negotiated the cost of the repair off the purchase price. You are on a bit of a sticky wicket as Jason says as you had no interest in the property at that time.

Jonathan Clarke

2:48 AM, 29th May 2015
About 4 years ago

I sold one of my properties and made a retrospective insurance claim on some old damage caused when i did own it even though I didn`t own the property anymore. This benefitted the new owner

Tony Simpson

8:18 AM, 29th May 2015
About 4 years ago

Hello all. Thanks for the comments. Much appreciated.

It's a top floor flat. There was an extensive leak in the roof which damaged my property's ceilings, walls and some.of the flooring. Roof was repaired by the freeholder and cost distributed to all the leaseholders.

My solicitor also suggested I ask the previous owner to claim on the buildings insurance for my benefit. I could be lucky here as I am also purchasing another property from the same guy so we're still in contact.

Thanks again all. Will keep you posted. Keep your fingers crossed for me!

Neil Robb

22:54 PM, 30th May 2015
About 3 years ago

If there was damage there did you get the property at a discounted rate.


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