Fire damage and re-housing tenants – Help!

by Readers Question

11:47 AM, 3rd November 2015
About 3 years ago

Fire damage and re-housing tenants – Help!

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Fire damage and re-housing tenants – Help!

One of my 3 bed houses that I lease out as an HMO (Scotland) to 3 student girls caught on fire on Friday past. The bathroom fan stopped working and overheated and burnt out.help

The girls had told me about it a couple of weeks previous and I had purchased a replacement to fit on Saturday past. Well, I didn’t manage it as the fan caught on fire on Friday with a 4 fire engine call out.

The house now has no power and is smoke damaged.

My insurance won’t cover temporary accommodation for the girls only loss of rent.

What are my responsibilities here?

They are good tenants and have been with me for 3 years so I want to look after them but the cost is astronomical to get a replacement 3 bed serviced apartment. This seems to be my only option but it comes in about £800-1000 a week. With the rent only coming to me being £1300 a month you can see my problem.

The damage is quite severe but I can’t get a loss adjuster to come to mine before Wednesday this week and then she will have to agree to the quote I have managed to get. Only 1 of the 3 companies I’ve had round so far seems to grasp what needs to be done and be able to support me. This guy reckons he can get the girls back in relatively quickly cleaning painting and sorting the electrics.

The plan is to get the house electrics back on and safe, clean and decorate and get the girls back in until they can come round and sort the roof shortly after. (it’s safe at present and watertight)

I put the girls up in serviced accommodation, but I’ve managed to find another apartment for a week with a 2 double rooms. They are now complaining (understandably) because they have 3 weeks till their final exams.

What are my responsibilities here?

I have to house them as per the contract right?

I know I can’t claim this back from my insurance but does this count as a loss for my tax return?

Thoughts, opinions and sage advice desperately required.

Scott



Comments

Neil Patterson

11:55 AM, 3rd November 2015
About 3 years ago

Hi Scott,

I found this from the Guild of residential landlords >> http://www.landlordsguild.com/house-destroyed-by-fire-or-flood/

Duty to provide alternative accommodation

There is no rule, act of Parliament or case law which provides in the event of a property rendered uninhabitable by some disaster that the landlord must start ringing round accommodation providers or hotels, arranging alternative accommodation and providing the details or keys to the tenant. It is submitted this is the case even if the landlord was at fault and somehow caused the fire.

Cost of alternative accommodation

Whether the landlord must pay for the costs of re-housing a tenant albeit temporary will depend on whether the landlord is in breach of his repairing obligations or not and whether the fire was the landlords fault.

The landlord is not in breach of his covenant to repair until he has notice of the disrepair and a reasonable time has elapsed in which the repair could have been carried out (see O’Brien v Robinson [1973] A.C. 912). Therefore, if the fault was for example due to the electrics in the property but the landlord was not aware of any problem nor had the landlord received any notice of a defect, then, the landlord is unlikely to be liable for any damages to the tenant and therefore the landlord will not be liable to contribute towards the alternative accommodation.

If it is found the landlord was liable for the defect (perhaps by receiving notice of the defect and failing to act) and the tenant has found the defective condition of the premises to be intolerable and has reasonably taken alternative accommodation at reasonable cost, then the cost of this alternative accommodation will normally be recoverable from the landlord [Calabar Properties v Stitcher [1984] 1 W.L.R. 287, CA]

How badly the property has been damaged and whether alternative accommodation was reasonable and necessary will be down to the individual case in question and no strict set of rules will be able to answer that question.

Charles King - Barrister-At-Law

12:27 PM, 3rd November 2015
About 3 years ago

All good points as ever Neil. Do remember Scott that the landlord's statutory repairing obligation (in England at least) excludes landlords' liability for damage by fire (section 11(2)(b) of the Landlord & Tenant Act 1985). Also pay close scrutiny to the written terms of the tenancy agreement. The tenants are obliged to mitigate their losses by using the rent money which they are no longer paying to you for re-housing themselves.

Luke P

13:12 PM, 3rd November 2015
About 3 years ago

As more eloquently stated above, unless you're at fault then (unbelievably to most tenants), you not forced to re-house them.

Tenants often need reminding that they are not in a hotel and do not have a concierge service.

As good as you say they are, I suspect that if you give an inch (perhaps offer to pay for their deposit on another place, and being students who will likely have little in the way of cash reserves, they will expect more...mainly because they will see all this as not their fault and they don't have the means to afford somewhere else), they will try to take a mile.

Despite politicians wishes to move to a more mainland European style rental market, this also requires tenants to become similar to mainland European style tenants in that they treat the house very much as their own, often fitting kitchens at their own expense etc, not relying on the landlord to essentially babysit them all of the time.

Steve From Leicester

13:59 PM, 3rd November 2015
About 3 years ago

Above is correct.

Letting a specific property to someone doesn't create a general obligation to provide them with a home. You're not the council or social services, nor are you their Mum and Dad.

Of course you may take a business decision to help good tenants out, or you may simply feel that you have a moral obligation to do so, but there is no requirement in law.

Ian Ringrose

20:26 PM, 3rd November 2015
About 3 years ago

How long does the insurance cover lost rent if the tenants decide to move else where and you can't get new tenants until the next university year?

Steve Masters

10:22 AM, 4th November 2015
About 3 years ago

Sadly, when you suffer a fire or any other disaster, it's going to cost everyone involved time, stress and money to some degree or other, with or without adequate insurance. That's life!

No one could foresee the stopped bathroom fan burning the house down before you had chance to repair it. You are not in breach of your repairing covenant.

As others have said, you are not legally responsible for providing alternative accommodation. You are just as much a victim as your tenants are. The fire which was beyond your control has rendered your ability to fulfill your side of the contract impossible. The contract has become "frustrated".

One would hope your tenants have friends and family who will rally round and help them out with temporary accommodation in this emergency.

All that being said, your pockets are probably a lot deeper than your tenants, you might like to think about offering to shoulder some of the cost of emergency accommodation over the next few days until your tenants find their feet. But put an absolute time limit on it, two weeks should be ample. Have a look if there are any bed only B&B rooms (no breakfast) available in your area or negotiate a deal with a local B&B on behalf of your tenants. At the very least you should refund all rent paid for the portion of the rental period after the fire.

Explain to your tenants that their problems will only last a few weeks, yours will last for months and months and cost you far more. They only have to find a house, you have to rebuild yours!

It's probably best to part now on relatively good terms and go your own separate ways.

I wish you all the better fortune to come.

Romain Garcin

19:13 PM, 4th November 2015
About 3 years ago

One thing, though, which is also mentioned in the link Neil's posted, is that rent continues to be payable unless there is an explicit provision to the contrary.

IMHO, a landlord who does not want to be involved in re-housing his tenant should being waiving rent.
For a residential tenancy, and with the consumers protection laws we have these days, I wouldn't be surprised if a court found that the landlord should provide alternative accommodation if the rent continues to be payable.

Donald Tramp

18:31 PM, 6th November 2015
About 3 years ago

Well folks, I've had a tough week! Sorry for not posting up despite all your responses I have been absolutely flat out every night. Thank you all for your thoughts.
The loss adjuster has been.
I have decided to fund the temporary accommodation (at present anyway) despite it costing me a fortune. Am I mad??? They still have the lease till the end of August. They have been good tenants and I am trying to do the right thing even although I don't believe I am obliged under law.
So that's 2 weeks of expensive serviced apartments out of my pocket paid for....
I've had loads of quotes and I've managed to get contractors to start on Monday and they should have the property back to liveable standards by Friday this week coming.
I got contacted by one of the tenants tonight asking if I knew a good drycleaner. I responded with one and she said that she was going to keep the receipts for my insurer!!! I explained that neither the insurance company or me would be paying for anything in her room. Only one of the tenants has contents cover.
She is going to apparently give me an invoice!!!

She reckons that I am at fault and have to pay because they told me 3 weeks ago that the fan wasn't working.

Can you believe this???
Yup we are all nasty landlords eh?

Donald Tramp

18:48 PM, 6th November 2015
About 3 years ago

This is the clause in my insurance about Alternative accommodation in my insurance policy. I thought (when I took the insurance out!) that 1(a) meant that alternative accommodation was covered. Apparently, it doesn't mean that despite how it reads! Can someone with better knowledge than me explain why? I don't understand the legal term "lessee" it would seem.

Asset Protection Property Damage Section

The following is added to the list of Clauses
Loss of Alternative Accommodation or Rent for Residential
Units
Where any Residential Unit cannot be lived in or if access to it is denied as a result of
Damage and where not otherwise insured We will indemnify
(1) (a) You or Your lessee in respect of the cost of reasonable alternative accommodation and/or ground rent and/or management charges
or
(b) You in respect of Gross Rentals
and/or
(2) You or Your lessee in respect of the cost of reasonable alternative
accommodation for domestic pets where such pets are not permitted in any alternative accommodation

and/or
(3) You in respect of the temporary storage of Your Contents or Contents of
Common Parts.
(3) You in respect of the temporary storage of Your Contents or Contents of
Common Parts.
The maximum we will pay in respect of any one claim is 20% of the Sum Insured on the
building insured under the Asset Protection Property Damage Section of this Policy in
which the Residential Unit is contained subject to a Maximum Indemnity Period of 12
months.
The following definitions apply to this clause
Gross Rentals Money paid or payable to You by tenants for rental
of The Premises and for services provided in
connection with The Business at The Premises.
Indemnity Period The period during which The Business results are
affected due to the Damage, beginning with the date of the Damage and ending not later than the Maximum Indemnity Period.
Maximum Indemnity Period The number of months stated in The Schedule,
unless amended in any Additional Contingency.

Jim S

12:55 PM, 7th November 2015
About 3 years ago

I am an electrician and have never known a fan to cause a fire in normal conditions, even under fault conditions the casing of the fan should be such that a melting/overheating fan would not cause a fire. I can tell you what I have seen many times done by tenants is that they stuff tissue paper in to the fan blades to stop any draughts' and then the motor overheats because it is working against pressure. I'm not saying that this would cause a fire but a load of dry tissue around the fan would certainly assist a fire.
I had a house fire about 23 years ago because the tenants were buying drugs off the local gangsters and not paying the bill, the gangsters then petrol bombed my house. I ended up taking the tenants to court and the judge ruled that the tenancy had become "FRUTRASTED" and was at an end and that all tenancy obligations had ceased at that time. I don't think that you should have to be providing any alternative accommodation as your tenancy has now become frustrated and any "consequential loss" is down to the tenant. They should have insurance in place for this.

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