Service charge accounts
An interview with Andrew Bond, partner at Smith & Williamson. Andrew's work covers a range of assurance related issues such...
By Fenella Maddan, Legal Adviser
Unfortunately water leaks are very common in buildings containing flats. When your upstairs neighbours use washing machines, showers, radiators etc leaks can occur.
First establish the cause of the leak and what immediate action is required to stop it. This is not always a straightforward matter because the building is likely to contain many pipes and appliances. Also it is possible for water to travel through the structure of the building before emerging in an individual flat. It is a good idea to look at the buildings insurance policy to see if there is cover for tracing the source of a leak. If you have a professional managing agent, they are likely to be able to assist at this stage.
Once the source of the leak has been identified, you can move on to establishing responsibility for the inevitable costs involved and necessary repairs. Typically, an individual leaseholder will be responsible for pipes and other apparatus exclusively serving their flat even if they are not within the area of the flat. Any communal pipes or apparatus (eg water tanks) serving more than one flat will be the responsibility of the landlord or management company. It is very important to examine the relevant leases carefully because provisions can vary.
There is also a question of negligence or nuisance when establishing legal responsibility. In the case of a bath left running responsibility may be due to the occupier’s negligent act or omission, but in most cases it is not so straightforward. You should inform the party(s) most likely to be responsible for the water ingress as soon as possible. If appropriate steps are not taken by the party responsible to rectify a problem once they become aware of it additional liability is likely to follow. You should also take steps to mitigate your own loss, eg drying out carpets and moving objects. Keep evidence of any expenditure incurred as a result of the leak.
It is a good idea to report water leaks to the buildings and contents insurers as soon as possible in case a claim needs to be made. Water leaks are commonly covered by insurance, but there is likely to be an excess payable. The excess on buildings insurance will either be recoverable from the party responsible for the leak or all leaseholders through the service charge depending on whether it is a “fault based claim” and on the wording of the lease. An example of a “fault based claim” is someone letting their bath overflow. Even though this is not intentional it is likely to be seen as negligent.
It is very important to deal with water leaks quickly because damage resulting from damp and other associated problems can be extensive.