Covid-19 Bounce Back loans for property businesses16:06 PM, 5th May 2020
About 4 weeks ago 47
I own and rent out the downstairs of 2 leasehold flats located in Woodford Green, Essex. The owner of each flat insures their part of the building separately as per the conditions of the leases.
The water tank servicing the downstairs flat is located in the loft connected to the upstairs flat. It was recently established (? there are some doubts around this but for the purpose of this query I’ll use the word ‘established’) that a leak from this water tank caused damage to both the upstairs and downstairs flats.
As the repairs to my downstairs flat were minimal I chose to pay for these myself. The upstairs neighbours, however, are refusing to claim on their insurance to repair the damage upstairs, citing increased premiums and the excess payment as the reason. As my insurer will not pay for the damage to the upstairs flat, they have insisted that I pay the repair bill for upstairs out of my own pocket.
I myself am of the opinion that their insurance is there for such an unforeseen incident, particularly as we share the same roof to which my access is very limited indeed. Utilising my neighbours’ logic, by extension, were a faulty gas cooker in my downstairs property to cause a gas explosion which destroyed both flats, they would not consider themselves legally responsible to claim on their insurance for the rebuilding of their flat, but rather would expect me to pay for this out of my own pocket. This is obviously a very unsatisfactory state of affairs and not what I would imagine should happen in a real life scenario nor what the law or insurance industry would have intended.
In view of the above, if I refuse to pay for the damage to the upstairs flat and the upstairs neighbours took me to court as they are threatening to do, would they be likely to succeed, or would the court be likely to see my point of view, ie. that it would be standard market practice for them to claim on their insurers as their insurance in this case is there to protect against unforeseen incidents of which this is one. I hope (and imagine) that there would be some precedent in relation to this situation. (The neighbour claims to have spoken to his solicitor in this regard and is now claiming that I have been ‘negligent’. I have, however, absolutely no idea how I may have breached my duty of care as I have owned the property since 1990 with no issues with regard to the tank and have extremely limited access to it as it is located in my neighbours’ loft). I am also concerned of course, that if I did settle all of the neighbours’ bills there would be nothing to then stop them also claiming on their insurance for the damage, ie. ‘double dipping’
I am considering offering the neighbour a token amount to cover their excess and any increase in premium for the first year after the claim purely as a goodwill gesture but am not sure if this is wise as it could be construed as admission of liability.
Any advice would be very much appreciated.
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