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Who Would be Responsible?

including wills and probate
NegevSouth
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Who Would be Responsible?

#244529

Postby NegevSouth » August 15th, 2019, 1:56 pm

I'm asking this on behalf of an elderly relative.

She owns a small commercial property comprising of 2 floors. Top floor is offices and ground floor is shops.
Extensive flooding was caused by an office toilet upstairs when its cistern broke. The water cascaded down into one of the shops and has damaged the tenant's complete stock.

The tenant does not have insurance cover for stock, fixtures and fittings. So he asked the landlord if she would claim on her insurance for his stock etc. The landlord's insurance company has refused to accept a claim for the tenant's stock. They say that the tenant should have insured separately for their stock.

As a result, the extensive damage to stock will put the tenant out of business. He is now seeking legal options. Do you think he has a case to sue the landlord even though he chose not to insure his stock in the first place, in order to cut costs?

didds
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Re: Who Would be Responsible?

#244530

Postby didds » August 15th, 2019, 2:10 pm

IANAL so this is no more than conjecture...

I would imagine that if the tenant had had insurance, whilst they could have claimed on it, it may well be the insurers may have been able to then sue the landlord themselves to recoup their own losses.

I'm more than happy to be wrong!

didds

supremetwo
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Re: Who Would be Responsible?

#244537

Postby supremetwo » August 15th, 2019, 2:39 pm

NegevSouth wrote:I'm asking this on behalf of an elderly relative.

She owns a small commercial property comprising of 2 floors. Top floor is offices and ground floor is shops.
Extensive flooding was caused by an office toilet upstairs when its cistern broke. The water cascaded down into one of the shops and has damaged the tenant's complete stock.

The tenant does not have insurance cover for stock, fixtures and fittings. So he asked the landlord if she would claim on her insurance for his stock etc. The landlord's insurance company has refused to accept a claim for the tenant's stock. They say that the tenant should have insured separately for their stock.

As a result, the extensive damage to stock will put the tenant out of business. He is now seeking legal options. Do you think he has a case to sue the landlord even though he chose not to insure his stock in the first place, in order to cut costs?


Yes, he does have a case to recover his losses.

Insurance for his stock is not compulsory and it was not his fault that the water leaked from above.

Agree with didds re. insurer recouping if he had cover.

richlist
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Re: Who Would be Responsible?

#244544

Postby richlist » August 15th, 2019, 3:18 pm

Do the normal rules not apply if its commercial property ?

With residential property you can only successfully claim against the owner of the upper property if they can be shown to have been negligent in some way. If there is no negligence then they would not normally be liable.

didds
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Re: Who Would be Responsible?

#244559

Postby didds » August 15th, 2019, 4:37 pm

And - notwithstanding the business v personal aspect suggested above - I've just thought if he DID have insurance that paid out, he may wish to recoup any excess on that settlement anyway by approaching the landlord for reimbursement.

didds

supremetwo
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Re: Who Would be Responsible?

#244569

Postby supremetwo » August 15th, 2019, 5:32 pm

richlist wrote:Do the normal rules not apply if its commercial property ?

With residential property you can only successfully claim against the owner of the upper property if they can be shown to have been negligent in some way. If there is no negligence then they would not normally be liable.

The negligence aspect comes into play in that your own insurers will expect you to pay the claim if you have been negligent.

An insurer cannot use 'accident' to deny liability to a third-party claimant.

pochisoldi
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Re: Who Would be Responsible?

#244575

Postby pochisoldi » August 15th, 2019, 5:52 pm

NegevSouth wrote:As a result, the extensive damage to stock will put the tenant out of business. He is now seeking legal options. Do you think he has a case to sue the landlord even though he chose not to insure his stock in the first place, in order to cut costs?



If the leaseholder were to sue it would be on the basis that the landlord had an obligation to insure, and they failed to do so (breach of contract).
This would be unlikely - stock, fixtures and fittings are the leaseholder's responsibility, and nothing to do with buildings insurance (for which the landlord may or may not be responsible for arranging on the leaseholders behalf - look at the leases).

If the downstairs leaseholder was to sue the landlord for negligence, they would have a hard time proving it.
If the upstairs lease makes the upstairs leaseholder responsible for the maintenance and upkeep of the pipes/cisterns etc, then I'd say it would be nigh on impossible to pin anything on the landlord.

I would be interested to find out what is meant by "it's cistern broke" - toilet cisterns don't break on their own, or spontaneously fall off a wall.
Even if the landlord was responsible for maintaining the cistern, if the landlord was never informed of the problem, they can't be found negligent just because their spider senses didn't tingle or their crystal ball malfunctioned...

PochiSoldi

pochisoldi
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Re: Who Would be Responsible?

#244582

Postby pochisoldi » August 15th, 2019, 6:11 pm

richlist wrote:Do the normal rules not apply if its commercial property ?

With residential property you can only successfully claim against the owner of the upper property if they can be shown to have been negligent in some way. If there is no negligence then they would not normally be liable.


Not in the block where I own a flat. (E&W, original lease drafted first half of the 1970s)
The lease has strict liability for uninsured losses due to water escapes - if water escapes in your flat and damages another flat, and a claim is made on the building policy you (the "leaker") pay, regardless of negligence, accident, act of cat/dog etc.

Don't ask me whether that clause also makes leaseholders liable for downstair's uninsured contents losses (my gut feeling is no, but I don't have an off the top of my head reason why)

PochiSoldi

NegevSouth
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Re: Who Would be Responsible?

#244597

Postby NegevSouth » August 15th, 2019, 7:26 pm

pochisoldi wrote:
NegevSouth wrote:As a result, the extensive damage to stock will put the tenant out of business. He is now seeking legal options. Do you think he has a case to sue the landlord even though he chose not to insure his stock in the first place, in order to cut costs?



If the leaseholder were to sue it would be on the basis that the landlord had an obligation to insure, and they failed to do so (breach of contract).
This would be unlikely - stock, fixtures and fittings are the leaseholder's responsibility, and nothing to do with buildings insurance (for which the landlord may or may not be responsible for arranging on the leaseholders behalf - look at the leases).

If the downstairs leaseholder was to sue the landlord for negligence, they would have a hard time proving it.
If the upstairs lease makes the upstairs leaseholder responsible for the maintenance and upkeep of the pipes/cisterns etc, then I'd say it would be nigh on impossible to pin anything on the landlord.

I would be interested to find out what is meant by "it's cistern broke" - toilet cisterns don't break on their own, or spontaneously fall off a wall.
Even if the landlord was responsible for maintaining the cistern, if the landlord was never informed of the problem, they can't be found negligent just because their spider senses didn't tingle or their crystal ball malfunctioned...

PochiSoldi


You asked specifically what was meant by the cistern.

I have checked with my relative (the property owner) and she said it was the actual ballcock. Her plumber said that it probably snapped around 5-6am on Monday morning, looking at the extent of flooding. It was not discovered until the tenant arrived at 9am.

Steveam
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Re: Who Would be Responsible?

#244633

Postby Steveam » August 15th, 2019, 9:56 pm

And if the downstairs tenant had a couple of Rembrandts in stock ...

Avantegarde
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Re: Who Would be Responsible?

#244636

Postby Avantegarde » August 15th, 2019, 10:13 pm

I have no expertise in these matters at all, but I would be interested to read the landlord's insurance policy. The insurer may be denying any claim for damage caused to the stock of the downstairs tenant in the shop. But is that what the policy actually says? And what if the landlord faces a legal claim for damages (due to negligence or whatever)? Does the insurance policy really not cover such eventualities?

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Re: Who Would be Responsible?

#244686

Postby Watis » August 16th, 2019, 8:50 am

pochisoldi wrote:
If the leaseholder were to sue it would be on the basis that the landlord had an obligation to insure, and they failed to do so (breach of contract).
This would be unlikely - stock, fixtures and fittings are the leaseholder's responsibility, and nothing to do with buildings insurance (for which the landlord may or may not be responsible for arranging on the leaseholders behalf - look at the leases).

If the downstairs leaseholder was to sue the landlord for negligence, they would have a hard time proving it.
If the upstairs lease makes the upstairs leaseholder responsible for the maintenance and upkeep of the pipes/cisterns etc, then I'd say it would be nigh on impossible to pin anything on the landlord.


I would be interested to find out what is meant by "it's cistern broke" - toilet cisterns don't break on their own, or spontaneously fall off a wall.
Even if the landlord was responsible for maintaining the cistern, if the landlord was never informed of the problem, they can't be found negligent just because their spider senses didn't tingle or their crystal ball malfunctioned...

PochiSoldi


IANAL...

It is unclear to me from the OP whether both the shop and offices are let to the same tenant, or to two separate tenants. I would be interested to know whether this makes a difference.

Either way, I'm guessing that this will have to be decided on the wording of the various contracts.

Watis

pochisoldi
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Re: Who Would be Responsible?

#244707

Postby pochisoldi » August 16th, 2019, 10:10 am

Watis wrote:It is unclear to me from the OP whether both the shop and offices are let to the same tenant, or to two separate tenants. I would be interested to know whether this makes a difference.


If they are let to the same legal person, then that person can't sue themselves for damages.

Note the use of "legal person" - if Joe Bloggs (aged 55) rents the shop, and Joe Bloggs Ltd rents the office, then Joe Bloggs can sue Joe Bloggs Ltd, even though Joe Bloggs actually owns all the shares in Joe Bloggs Ltd.

modellingman
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Re: Who Would be Responsible?

#244710

Postby modellingman » August 16th, 2019, 10:17 am

NegevSouth wrote:
You asked specifically what was meant by the cistern.

I have checked with my relative (the property owner) and she said it was the actual ballcock. Her plumber said that it probably snapped around 5-6am on Monday morning, looking at the extent of flooding. It was not discovered until the tenant arrived at 9am.


Ordinarily a failed ball cock should not cause a problem. A ballcock is simply a float attached to an arm made of metal or plastic. The other end of the arm pivots. As the cistern fills the float causes the arm to rise and mechanically close the cistern's water inlet valve at the pivot end. Traditionally, cisterns have an overflow pipe leading out of the building to cope with failure of the ballcock/arm/inlet valve. Newer toilet flushers, of the flap-valve type, provide for any overflow to be discharged via the toilet pan rather than requiring a separate overflow pipe.

For a toilet cistern to cause flooding within the space of a few hours, suggests that the overflow arrangements were either faulty, inadequate or non-existent. In a residential situation liability would, in such a case, almost certainly lie with the landlord who will have supplied the sanitary fittings as integral part of the let property. In a commercial situation, whether the liability rests with the landlord or tenant of the upstairs property will probably be determined by a combination of what the leases say and who installed the offending cistern (and therefore had responsibility for ensuring adequate overflow arrangements in compliance with building regulations).

pochisoldi
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Re: Who Would be Responsible?

#244722

Postby pochisoldi » August 16th, 2019, 10:39 am

modellingman wrote:For a toilet cistern to cause flooding within the space of a few hours, suggests that the overflow arrangements were either faulty, inadequate or non-existent.


Or tampered with.

Do both the shop and office have access to the toilet?

If they do, the words "poorly executed insurance job" might enter my mind at some point.

I'd be interested to know how the plumber nailed the time period to 5 or 6 in the morning. (It's not as if we are talking about a dead body and whether it was still warm or if rigor mortis had set in or not) If his analysis is correct, it doesn't stretch the imagination to think of the shop owner rocking up early, to have some undisturbed early morning amateur plumbing practice, then go back home for a bit more shuteye...

Or maybe I'm just a hardened cynic.

NegevSouth
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Re: Who Would be Responsible?

#244734

Postby NegevSouth » August 16th, 2019, 11:01 am

Thanks for all your replies.... Just to clarify:

The owner occupies the top floor office alone, and therefore she is the only one with access to the toilet that leaked.
She leased the ground floor shop to a tenant. It is his stock that has been damaged .

The owner's toilet does have an overflow pipe which should have diverted water into the pan. Unfortunately it didn't.

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Re: Who Would be Responsible?

#244748

Postby Howard » August 16th, 2019, 11:34 am

NegevSouth wrote:Thanks for all your replies.... Just to clarify:

The owner occupies the top floor office alone, and therefore she is the only one with access to the toilet that leaked.
She leased the ground floor shop to a tenant. It is his stock that has been damaged .

The owner's toilet does have an overflow pipe which should have diverted water into the pan. Unfortunately it didn't.


Could I suggest that this is a case where your friend does need to get some informed/professional advice. With all due respect to other posters, this isn't the sort of issue that can be solved by amateurs who have strong views about insurers or plumbers :D .

Your relative is running a commercial business. She has a business contract with an insurer. The insurer almost certainly has, over the years, experience of dealing with hundreds or possibly thousands of cases very similar to this. They will have drawn up the insurance contract very carefully, knowing what risks they are covering and what risks they are not covering. A professional will be able to advise your relative what action to take. If you run a commercial operation, like renting accommodation, there are times when you have to pay for advice.

I personally don't like paying professionals to do what I can do myself, but sometimes you just have to use them. Following the advice of amateurs who don't know the full implications of an event, might prove to be much more expensive (and distressing) than taking the boring and slightly more expensive route of taking professional advice.

Yes, one does read the occasional case where, for PR reasons, insurers waive their legal rights when an unfortunate private individual seems hard-done-by. But my guess is that this won't happen in a commercial situation.

Very best wishes for your relative in a difficult situation.

Howard

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Re: Who Would be Responsible?

#244778

Postby didds » August 16th, 2019, 1:17 pm

pochisoldi wrote:Note the use of "legal person" - if Joe Bloggs (aged 55) rents the shop, and Joe Bloggs Ltd rents the office, then Joe Bloggs can sue Joe Bloggs Ltd, even though Joe Bloggs actually owns all the shares in Joe Bloggs Ltd.




Hmmm... could this be a (potentially fraudulent!) method of JB getting money out of JB Ltd without paying any taxes on it (whether as income or dividends after Corp tax ).

?

didds

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Re: Who Would be Responsible?

#244841

Postby Clitheroekid » August 16th, 2019, 5:02 pm

It's really quite straightforward.

Simply because the water came from the flat doesn't automatically mean that the owner is liable. The occupier of the shop has to prove that the owner was negligent in order to recover any compensation. Unless she knew, or should have known that the overflow didn't work then I don't see how she could be held negligent.

If she wasn't, then her insurers have no liability either - they exist to indemnify someone against legal liability, so if the insured has no legal liability then neither do the insurers.

It's the shop owner's own stupid fault for not having insured his goods.

Howard
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Re: Who Would be Responsible?

#244896

Postby Howard » August 16th, 2019, 8:31 pm

Clitheroekid wrote:It's really quite straightforward.

Simply because the water came from the flat doesn't automatically mean that the owner is liable. The occupier of the shop has to prove that the owner was negligent in order to recover any compensation. Unless she knew, or should have known that the overflow didn't work then I don't see how she could be held negligent.

If she wasn't, then her insurers have no liability either - they exist to indemnify someone against legal liability, so if the insured has no legal liability then neither do the insurers.

It's the shop owner's own stupid fault for not having insured his goods.



Yes, thanks for the Professional opinion CK. But, with respect, you haven't given the elderly lady the full solution. She may still be nervous about her tenant who appears to be threatening legal action. Are you suggesting she tells him personally that it is his own (stupid) fault? :D

Surely approaching a Solicitor and asking him/her to check her insurance contract and then draft a letter to the tenant won't cost a fortune and this should remove any personal difficulty. It should also gently deter him from pursuing her for compensation. Surely it's a minor cost in running a business and should provide peace of mind for this lady?

regards

Howard


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