Can a leak caused by tenant negligence lead to a claim against the freeholder?

Tenants catch ceiling leak with buckets while calling insurer after block insurance voided

by Readers Question

12:02 AM, 11th November 2024, 1 year ago 3

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Advice Landlord News Landlords Questions Lettings & Management

Hi, I own the leasehold for an upstairs flat, which I rent out to tenants. The issue I have is when the tenants cause damage downstairs due to an act of negligence, such as kids spilling water out of the bath or having a shower without the shower curtain closed. This leads to damage in the downstairs flat, which belongs to another leaseholder.

From what I understand, the claim from the downstairs leaseholder should technically be directed at the tenants, as the damage is due to their negligence. Is that correct?

The problem comes from a clause in the lease which states that the leaseholder must indemnify the freeholder against acts of omission (which I understand to mean negligence) from both the leaseholder and any underlets (tenants) or contractors. The lease also mentions that if the insurance doesn’t cover acts of omission, the leaseholder must still indemnify and reimburse the freeholder.

So, if the downstairs leaseholder makes a claim against the freeholder, it seems I could be liable, and there may be no insurance coverage for this. Is that correct? If so, is there a way to avoid this situation?

If this is accurate, what type of insurance would cover me? I’ve looked into landlord insurance, and even those that include accidental damage, but they only cover the landlord’s property, not someone else’s. It seems I would need some sort of liability insurance, but do any policies cover situations like this? These types of things must happen all the time, so there should be coverage for it, right?

Thanks,

Jason

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Tags: accidental damage, indemnity clause, landlord insurance, landlord liability, leak damage, leaseholder responsibility, property damage claims, Property management, tenant insurance, tenant negligence, tenant responsibility

Comments

Andy

Member Since April 2021 - Comments: 95

11:59 AM, 11th November 2024, About 1 year ago

You are liable for your tenants as the leaseholder. This is probably stated in any agreement to sublet you may have been issued with, but regardless a freeholder would not be responsible for water damage caused by negligence of persons in your property and your lease clause just adds belt and braces to this position. Usually, a claim on the buildings insurance would be made by the leaseholder of the damaged flat and the leaseholder of the flat from where the damage was caused would pay the insurance excess, but check your lease in case instances of negligence are treated differently to say a genuine leak.
Your ‘problem’ actually is your tenants causing damage through negligence. If this results in you being out of pocket because of a building insurance claim (likely) you will have to claim back from their deposit when the time comes. But let them know now so that hopefully they can modify their behaviour.
We don’t use landlord insurance, so I’m not qualified to comment, but I’d be surprised if your can find cover for what you’re outlining here.

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LoneR

Member Since November 2024 - Comments: 1

10:44 PM, 11th November 2024, About 1 year ago

I am in a similar situation as the leaseholder whose flat has suffered extensive damage following an undetected leak from the flat above. The primary leak into my flat was discovered 10 weeks ago but seems to have started almost a year ago. There were secondary leaks, all from the offending flat above. The offending leaseholder has taken almost 8 weeks to fix the secondary leaks. I will claim for damage to my flat incurred in the last 10 weeks from the offending leaseholder of the flat above.This is for delay in fixing the secondary leaks.I cannot claim for the unknown primary leak. I do not have buildings insurance.

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Jim K

Member Since July 2023 - Comments: 181

10:25 AM, 13th November 2024, About 1 year ago

Whenever you get anywhere think:
What can I do to mitigagte x y z?
You mention shower curatin.
Can it be changed for a door?
Water on floor. Can you seal floor?
It’s not that easy being. LL and it’s expensive.

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