HMO tenant barricaded room and started £80,000 fire

by Readers Question

8:26 AM, 20th August 2018
About A year ago

HMO tenant barricaded room and started £80,000 fire

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HMO tenant barricaded room and started £80,000 fire

A month ago, one of my tenants in an HMO barricaded himself into his room and started a fire. He was rescued by the fire brigade, and although initially pleading mental health issues, has now been charged with arson and is on remand.

I am looking at a repair bill of circa £80,000 I think. I insured through Reich on the advice of this website, but the insurers, LV, are on the cusp of refusing liability, based on small print. I had declared the building to be an HMO, but they needed it to say “bedsit” as well, apparently. They have not said NO yet, but my loss assessor feels it is coming.

I have lost seven other tenancies as a result, and three others are living in tents in the garden. The council has imposed a prohibition order until the fire alarm is repaired/replaced, and this has been delayed at the behest of the insurers to find the cheapest option for reinstatement (before actually accepting liability ).

So my questions are:
1. Have I any other recourse other than just shelling out if LV decide to refuse liability?
2. Should one fight such a decision with lawyers or ombudsman or both should it come?
3. Any comments on the use of loss assessors? I took one on to supposedly help me in this difficult time, but he seems to be a prophet of doom more than anything else.
4. Should tenants who cannot sleep in their rooms , but still use them for storage of belongings still pay rent, maybe at a lower rate?

Ian



Comments

Mike

13:09 PM, 20th August 2018
About A year ago

Thanks Ian, that makes perfect sense, I just spoke to my insurance broker who incidentally phoned due to my policy is due for a renewal, so I asked him about this and yes he said exactly what you stated, bedsits have some means of catering for preparing some food etc, having a fridge in the room, and may be a washing basin, so I am now OK with mine as it is an HMO.

Mrs A

13:40 PM, 20th August 2018
About A year ago

Hi Ian,
sorry that you find yourself in such a horrible situation.
I think that it is very unlikely that LV will be able to entirely deny your claim. There was an Insurance Act passed last year that specifically seeks to prevent this type of claim refusal.
There isn't a huge amount of case law yet, but since the Act, the idea is that if they can show in their systems that they would have charged perhaps 10% more for bedsits over HMO, then they get to pay 10% less of your claim, not reject it outright.
Also, if there is any way of interpreting their wording or questionnaires in multiple ways, then the benefit of the doubt should go to the consumer.
My local council describes bedsits as including cooking facilities in each room and then further divides HMO into Category A and B. One is for student-type lets where a group of individuals will enter into a single AST, and the other is for single room lets where one property will have multiple ASTs for multiple individuals.
LV need to be clear if they want to differentiate between these property types.
Good luck.

John Parfett

14:02 PM, 20th August 2018
About A year ago

Reply to the comment left by Paul Maguire at 20/08/2018 - 10:19
Oh My God!

Mike

14:44 PM, 20th August 2018
About A year ago

Reply to the comment left by John Parfett at 20/08/2018 - 14:02
just hope he don't set prison on fire! , endangering life of others as well.

Yvonne Francis

15:41 PM, 20th August 2018
About A year ago

Reply to the comment left by Mike at 20/08/2018 - 11:12
Hi Mike
I don't know much about self contained bedsits or flats but I do know if there are shared facilities it is a HMO. Ian does not say if his property has shared facilities but he does say it is a HMO which as far as I know indicates shared facilities and in my experience it makes a difference to insurance.

The thinking behind all this is in shared HMO tenancies they rent as a group, have access to each other rooms and do not have internal locks and live to a greater or lessor extent as a family so this is considered a lower risk. In bedsits they often do not know each other and have locked rooms even though they share facilities.

In answer to your question I think it is probably not a HMO if the bedsit is completely self contained including cooking and bathroom. A Landlord next to one of my houses have self contained bedsits and some rooms with shared facilities. He described his house as 'partly a HMO'.

Ian Narbeth

16:29 PM, 20th August 2018
About A year ago

Reply to the comment left by Yvonne Francis at 20/08/2018 - 15:41
Hi Yvonne
My HMOs have shared kitchen/living areas. And yes it is different for insurance purposes. The question here is between bedsit and non-bedsit HMOs.

Bedsits within a house are NOT "partly an HMO". They are in an HMO. Just Google the definition.
You write:
" I think it is probably not a HMO if the bedsit is completely self contained including cooking and bathroom." That is only correct if the bedsit is in fact a flat. If the tenant crosses a communal hallway to get to the front door then he is in an HMO even if he has his own cooking and washing facilities.

Yvonne Francis

18:27 PM, 20th August 2018
About A year ago

Reply to the comment left by Ian Narbeth at 20/08/2018 - 16:29The trouble is Ian we may be arguing over terms. I cannot help wondering what you think is a flat as opposed to a self contained bedsit? A studio flat perhaps? I was for the purpose of covering as many points as possible in answering Mike considering one room with cooking facilities and very small bathroom facilities as a bedsit.
I did not mean bedsits are 'partly HMO's'. I was refereing to an entire house with mixed accommodation where some parts where shared and some completely self contained.
I would still like to defend the argument that the issue of whether or whether not a unit is self contained is the critical criteria as to whether it is a HMO unless of course it is occupied by three (applies in most area's now) unrelated tenants. Even flats if they have a shared toilet outside their self contained unit can be deemed a HMO.
I do not understand your argument of hallways as all flats have hallways of some description and most flats are not HMO's.

Gromit

18:48 PM, 20th August 2018
About A year ago

Have you tried a secialist property claims management company like Aspray https://aspray.com/property-insurance-claims-management/
PS I've no connection to Aspray

David Mensah

22:24 PM, 20th August 2018
About A year ago

Ian, so sorry to hear about this, what a terrible situation.

A few years ago, I noticed that most of my landlord insurance policies had put in exculsions for malicious damage by tenants. I had my borker do a search to find policies without such exclusions, but they were relatively rare.

I understand why malicious damage is excluded for your own home, but surely if a tenant goes postal that is the whole point of insurance.

Ian Simpson

9:52 AM, 21st August 2018
About A year ago

Thanks for all the comments and support people... Yes the policy definitely covers malicious damage and Arson, so no worries there... A far as the HMO bit goes , it is a mix : five of the fourteen rooms share a kitchen and two communal bathrooms, nine have their own bathrooms and have either a hotplate or a microwave and fridge. Apparantly there was a question on the statement of fact form as to how many Bedsits there are in the building. I am pretty sure I put NINE , but my loss assessor says I have put NONE !! , O and I are next to each other on the keyboard, so this may be a simple typo!! Hopefully not a £80,000 typo!!

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