Question 1

Insurance

Accepted Answer

Insurance Q: Our residential block comprises 43 flats over nine floors and is part of a complex that includes commercial units at ground and first floor levels. The complex is owned by the freeholder, he has granted a 125-year lease from 1989 to our landlord. He then leases the flats on the same term to the 43 flat owners. The outside of our block has not been maintained for the last 13 years despite our asking that this be done, and in 2015, 2016 & 2017 some of the mosaic cladding fell off, fortunately causing no injury or property damage. In September 2018 we sent a safety assurance plan to the managing agent to undertake (cleaning, inspection, surveillance programme) and we asked for a copy of our buildings insurance, which is placed by the Freeholder. We were eventually furnished with a copy in February 2019. It had been placed in July 2018 and covers property damage and third-party liability. It contains an exclusion clause: 'It is noted that in the event of any loss or damage resulting from the ongoing maintenance issue with the tiles all cover will be excluded including, but not limited to, Third Party Property Damage and or Injury, Water Ingress, Accidental Damage or Storm.' This had been in place 8 months and nothing had been done to mitigate risk or inform leaseholders. We contacted the freeholder, landlord and managing agent asking that the steps we had recommended be adopted immediately. This has not yet been carried out. Roped access contractors have confirmed that they can make safe and repair using ropes and a long reach mobile work platform. If injury or damage does occur, who is liable to compensate the victim? The insurance renewal in July will be difficult given the lack of any mitigation for nine months - can we refuse to pay? FPRA Insurance expert Belinda Thorpe replies This is quite a situation for the residents to have the worry of – which is such a shame as it looks like they are both concerned about the care of their property as well as concern over and potential risks to the people/residents/visitors to the property – an ominous challenge! The insurance is in the name of the freeholder therefore there appears to be adequate insurance protection in place – apart from the limitation placed at last renewal where cover has been restricted by removing cover relating to loss or damage resulting from the ongoing “lack of“ maintenance to a tiled roof area. As it is the responsibility of the freeholder to insure and/or maintain the block – any potential injury or damage I would expect to be compensated by the Freeholders Insurers – as cover has been restricted, the damage/injured party I would expect to try and claim from the freeholder – however I would suggest comment from a legal consultant could confirm this. To further protect themselves I would ensure that you write to all parties ensuring that in all circumstances you will not accept any liability for damages or injury which occurs due to the lack of maintenance. I would not recommend not paying your insurance contributions when it falls due for renewal. I would however use the time leading up to renewal to notify the freeholder and managing agent that any increase in premium required due to the lack of maintenance will need to be borne by the freeholder – which will hopefully encourage them to complete the required works. [Submitted May 2019]

Question 2

Insurance

Accepted Answer

Insurance Q: Our residential block comprises 43 flats over nine floors and is part of a complex that includes commercial units at ground and first floor levels. The complex is owned by the freeholder, he has granted a 125-year lease from 1989 to our landlord. He then leases the flats on the same term to the 43 flat owners. The outside of our block has not been maintained for the last 13 years despite our asking that this be done, and in 2015, 2016 & 2017 some of the mosaic cladding fell off, fortunately causing no injury or property damage. In September 2018 we sent a safety assurance plan to the managing agent to undertake (cleaning, inspection, surveillance programme) and we asked for a copy of our buildings insurance, which is placed by the Freeholder. We were eventually furnished with a copy in February 2019. It had been placed in July 2018 and covers property damage and third-party liability. It contains an exclusion clause: 'It is noted that in the event of any loss or damage resulting from the ongoing maintenance issue with the tiles all cover will be excluded including, but not limited to, Third Party Property Damage and or Injury, Water Ingress, Accidental Damage or Storm.' This had been in place 8 months and nothing had been done to mitigate risk or inform leaseholders. We contacted the freeholder, landlord and managing agent asking that the steps we had recommended be adopted immediately. This has not yet been carried out. Roped access contractors have confirmed that they can make safe and repair using ropes and a long reach mobile work platform. If injury or damage does occur, who is liable to compensate the victim? The insurance renewal in July will be difficult given the lack of any mitigation for nine months - can we refuse to pay? FPRA Insurance expert Belinda Thorpe replies This is quite a situation for the residents to have the worry of – which is such a shame as it looks like they are both concerned about the care of their property as well as concern over and potential risks to the people/residents/visitors to the property – an ominous challenge! The insurance is in the name of the freeholder therefore there appears to be adequate insurance protection in place – apart from the limitation placed at last renewal where cover has been restricted by removing cover relating to loss or damage resulting from the ongoing “lack of“ maintenance to a tiled roof area. As it is the responsibility of the freeholder to insure and/or maintain the block – any potential injury or damage I would expect to be compensated by the Freeholders Insurers – as cover has been restricted, the damage/injured party I would expect to try and claim from the freeholder – however I would suggest comment from a legal consultant could confirm this. To further protect themselves I would ensure that you write to all parties ensuring that in all circumstances you will not accept any liability for damages or injury which occurs due to the lack of maintenance. I would not recommend not paying your insurance contributions when it falls due for renewal. I would however use the time leading up to renewal to notify the freeholder and managing agent that any increase in premium required due to the lack of maintenance will need to be borne by the freeholder – which will hopefully encourage them to complete the required works. [Submitted May 2019]

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