Insurance payouts after a water leak in a Freehold flat?

Hi Kizzie,
The plumber doesn’t have a contract with the Management Co he is simply a plumber who does jobs as and when asked to do so by the various flat owners. Nobody is obliged to use him. Flat owners are free to ask any plumber or builder to do any works for them in their property.
Does that change things?
Christine

I would think you need a ‘recognised trader’ under contract to deal with all structural repairs which the RMC acting on behalf of Lessor in its role of maintenance under provisions of all the leases.

That would include the responsibility to maintain the pipework and would understand’ the building includes water testing, gutter cleaning, first-call for pipe leaks, so RMC has control over service charge costs and consistency of quality of work.

Whose role was it to ensure the valves etc were properly maintained?

I think you need a Managing Agent who offers a better service, and if you choose another you will also need to undertake a S.20 consultation.

You will need these undeclared repairs to be sorted and if the insurers won’t approve another plumber then their plumber might do it as an extra otherwise you will need a plumber to do the repairs before the insurers plumber arrives.

I would worry that the insurer’s plumber might report the undeclared repairs and then tell insurer which then demands the return of the settlement claiming it was a dishonest claim.

Do you hold a reserve fund. Is one required under provisions of your leases?

Hi Kizzy,
I think it would be a far better way of doing things if the Freehold Management Co had a recognised trader under contract. They do have an informal list of suggested tradespeople to help flat owners as and when they may need one but each flat owner is free to employ anyone they want. As it stands, nobody has the role to ensure the valves etc are properly maintained, or in fact, to maintain anything.
Given the position we are in, what we need to know is whether the RMC has the right to withhold the insurance money from my partner who is the flat owner, given we submitted the claim on behalf of the RMC and obtained the two quotations requested by the insurers.
Thanks

As you’ve said your partner is a member of the RMC and wears two legal hats : 1. a shareholder of RMC registered at Companies House with memorandum and articles and Coact 2006 and 2. as Lessee subject to his Lease.

Your partner owns a share of freehold interest held in the RMC I am assuming an embedded party in his lease and title.

The leaseholders are joint owners of the property and also tenants in common of the lease.

The joint owners legally have to work together for the benefit of the company holding the freehold interest, in accordance with M &A and Companies Act.

All leaseholders are directors and are also landlords.

So your partner has to stop thinking about himself and think about the benefit to the Company.

The MA should have informed the current directors that as shareholders they all bear debt liabilities if the RMC becomes insolvent and is struck off.

Directors can be prosecuted for failure to perform their obligations under M&A and Companies Act, ie failure to file annual accounts, failure to hold AGMs, EGMs , uphold Trust Law, Property Law, etc. This is a cost in service charges he is paying for the MA services.

So ask not what his company can do for him but what he can do for the RMC

Your partner doesn’t own a Freehold flat he owns a Leasehold flat with a share of the freehold.

Can he request that the money owed to your partner is transferred to him now and left to him to decide when the job is done and with whom? Simple answer, no.

Is your partner a Director of the Management Ltd or just a shareholder as a joint freeholder?

Ok, thanks. Simple answer has been what was needed.