# Management Company withholding insurance claim



## sunnyside

Hi,

I have had a recent claim on my apartment. All went well and the assessor and I agreed a figure, the insurance company paid out the money, but to the management company of the complex as they are the policy holders. The mgt. company will not give me the money, saying they are withholding it for this years mgt fees even though they have yet to have an AGM and issue us apartment holders with invoices etc.

I have got onto the insurance company who won't talk to me without the mgt companies permission as they are the holders of the policy. I have no hope of getting that permission. Insurance company are saying that they have done there bit as they paid out the money and its really now my own issue with the insurance company. .....any ideas??

To make matters more complex, my name was also on the cheque sent by the insurance company, but somehow the mgt company got the cheque cashed without my signature. How would I go about getting a copy of the cheque to prove this possible fraud? Remember insurance company have stated they won't talk to me anymore without the policy holders written permission.

I know its a toughie,..thanks for all advice,...


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## mercman

Unless you have a history of non payment or late payment I can see no reason for connecting these matters. ?I'd write to the MC requesting the details as to why they are acting like they are. I woukld then advise them that you will be instructing your solicitor to issue proceedings for which full costs will be borne by the MC


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## Claimsman

This makes my blood boil!!!!

The insurance company has discharged their liability by making payment to the named insured under the policy. The insured is normally the management company. You, as an apartment owner, are a member of the management company, therefore, you are in essence along with the other apartment owners, are _the insured_ under the policy. What is not clear from your post is whether it is the management company that is holding payment, or whether it is the management agents(they are employed by the management company to maintain the property, ie the likes of Wyse, O dwyer property managemnt etc), who are withholding payment. I suspect, it is the latter as it is normally them who collect management fees.

It is not common practice for the apartment owners name to be on a cheque. Legally,the Insurance company can only make out the cheque in the name of the policyholder..eg, the name of the management company ( *NOT* the agent). I suspect that the management company ( not agent) may have mandated that all cheques due under the policy be made payable to the management agent, who are now holding your money. 

As i said, the insurance company has discharged their liability. This is a matter between you are your management company. It would seem that they have authorised the management agents ( who, may i add are your servants and are paid for by the management fee) to cash a cheque that should be ear marked for you.

The main question is, has the management company committee acted outside of their authority in allowing your payment to go to the managment agents? I suspect that they may have. I disagree with Mercman only insofar as i wouldnt write to anybody, but i would instruct my solicitor to take the matter in hand immediately. I would also instruct my solicitor to advise that as repairs are being halted by the cheque being withheld, you will have no option but to avail of alternative accommodation at a cost that will be passed onto the management company committee and to the management agents. Of course, threaten them will your legal costs.

The management agent has no authority to give permission or otherwise to the insurance company and furthermore, the insurance company have no right to accept such an instruction. The management agent is *NOT* a party to the policy. Tell the insurance company that as a member of the management company, *YOU *are _the_ _insured_, and it is your right to know what payment has been made relevant to you under the policy. 

If the management committee has given the money to the management agent without proper authority, then they have a case to answer. As i say, kick up hell ( not very professional i know), but i have found in the past that this works best in these situations with people who make up the rules as they go along. 

Do let me know how you get on.

Claimsman


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## sunnyside

Thanks for the advice.
To clarify.

The developers have yet to hand over the building to us the owners, so they are in affect still the managment company and indeed are acting as managing agents at the moment too. So it is the people I bought the apartment from who have taken this money from me,..now thats galling,..!!

I have kicked up a fuss and written countless notes to the owners and threaten all sorts,..they keep ignoring me.

I have also pointed out to the insurance company that the aprtment isn't fixed yet and indeed they have been somewhat hoodwinked by the managment company as the money never ended up with me. The insurance guy basically is saying its not their problem. They are out of the loop once they sent the cheque.

There has to be some recourse somewhere,....?


Thanks for all the assistance.


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## mercman

And they are right -- the Insurance Company have performed. You need to tell all the other owners and either take over the existing MC or form a new Management Company.
The likelihood is that your Insurance Claim is being used for something else but not your claim. As I stated earlier, it is now time to get your solicitor involved. Hoiw much of the development has yet to be completed ??


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## sunnyside

The development is completed.
We have tried to take over the building but there are legacy debts there, so thats at a bit of a stale mate at the moment.

So, am i right in thinking my only option is to get my solicitor to write to them re: the chq? and hope that moves them on?

The insurance company won't talk to me,..won't give me a copy of the cheque etc. Is there a way to get a copy of the cheque?

Thanks so much


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## Ed054

I have dealt with a number of claims where the same issue has come up.
I have generally found the constant phone calls does work if not get your solicitor to chase up.
I would also sugest reporting the matter to the financial regulator as they would be interested to hear about the non release of a claim settlement cheque.


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## mercman

Ed054 said:


> I would also sugest reporting the matter to the financial regulator as they would be interested to hear about the non release of a claim settlement cheque.



Ed, I am not doubting you  at all but why would the Financial Regulator get involved in a Company matter. The Insurance company released the cheque to the MC who are the Insured. Surely the correct thing is to sue the developers who are possibly on shaky ground anyway and it seems that they have pocketed the claim money in the name of the MC. A good case of fraud it sound like to me.


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## Ed054

mercman said:


> Ed, I am not doubting you at all but why would the Financial Regulator get involved in a Company matter. The Insurance company released the cheque to the MC who are the Insured. Surely the correct thing is to sue the developers who are possibly on shaky ground anyway and it seems that they have pocketed the claim money in the name of the MC. A good case of fraud it sound like to me.


 
The OP's interest was noted in the policy and the management company are acting on his/her behalf as is the same for the owners of all the apartments in the development.
As the management company are acting as an agent they have responsibilities to the ultimate owner of the policy (who also pays for the policy) and in that regard it is there responsibility to make sure that all claim monies are passed to the owner of the damaged property and in this case they have failled to do so.  
In that regard they would fall under the the ever so watchful eye of the regulatory authority!


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## mercman

Ed054 said:


> they would fall under the the ever so watchful eye of the regulatory authority!



Oh don't we all wish !! I sent a file to them this week with pure basic factual information in relation to matters relating to a Financial Institution anf they replied that they will be unable to answer or discuss anything further with me as the matters must remain confidential under some Act. And the amount was a bit more than a small Insurance claim, so don't hold your breath waiting.


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## Claimsman

Ed, i completely agree with Mercman..( i have the exact same response as you have had Mercman)..the OP has had a frustrating time enough, without sending him  to the regulator. What a toothless useless sleeping guard dog that is!!! (Mods, that is fair comment against the regulator).If the Op is reading this, he should do three things...issue proceedings, issue proceedings and yeah, you guessed it, issue proceedings!


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## mercman

Claimsman, thank you for agreeing with me. I could write a book concerning Financial Providers in this country. And I have a Web site to get going as soon as a High Court appeal by an FP has been heard. Gangsterism at its best, from the Very Top down, by the largest provider of Investments in the country. They make me puke.


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## Ed054

mercman said:


> Claimsman, thank you for agreeing with me. I could write a book concerning Financial Providers in this country. And I have a Web site to get going as soon as a High Court appeal by an FP has been heard. Gangsterism at its best, from the Very Top down, by the largest provider of Investments in the country. They make me puke.


 
I don't disagree with you or claimsman I was only pointing out another option.
I also cannot disagree with your views of the regulator.


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## sunnyside

Hi all, firstly thanks for taking such time to reply.

Am I right in thinking there are possibly two separate issues here.

1) The fact that they won't pass on the majority of the claim to me. I should get a solicitor to issue proceedings against them.

2) The fact that my name was on the cheque, yet somehow they managed to get it cashed. Is this not a criminal act  / fraudulent act (same thing?) 
I have asked the insurance company for a copy of the cheque - they have refused. I have discovered where the management company have their bank a/.c - again no luck there. Should I contact the guards about this now?

As an aside, one of the developers / management company is an accountant,....does this help at all, can I use this in gaining me leverage or anything. 


Thanks again. You all have been very kind


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## mercman

sunnyside said:


> Should I contact the guards about this now?



If only it was that easy ?? Your best route in my opinion would be to hand it to a solicitor.


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## sunnyside

it seems a tragedy that it is so easy for these developers to get away with this. And I am the one stressed and will have to pay for solicitors etc.


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## mercman

And that is why I mentioned that you should write to them immediately advising them of your intentions of passing the matter to your solicitors and in the same correspondence advising them that all costs will for their account. The good news is that the MC will not be going anywhere and your costs will have to be paid sometime in the future regardless of the developer or accountant.


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## Complainer

Why not take it to the Small Claims Court?


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## sunnyside

would that be a realistic option?
Is it very timely, expensive? 
Can i represent myself or do I need a solicitor?
Thanks


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## Complainer

sunnyside said:


> would that be a realistic option?
> Is it very timely, expensive?
> Can i represent myself or do I need a solicitor?
> Thanks


It will cost you about €10 and you do not need a solicitor. I'm not certain if they will take on this kind of claim, though. Google for their guidlines and review them carefully.

They don't normally take claims relating to property, but I do know of one case of a successful claim for a solicitor's fee relating to a property transaction.


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## 10amwalker

Sorry to give a completely different view on the matter. I am a director of a management company and if a member of the company makes a claim on the block policy and they are arrears, the management company will deduct their arrears and give them the remainder if there is any.
The cheque is always made payable to the management company and not the individual owner nor the managing agent !!

The policy is taken out by the management company and why should a member be able to make a claim on a policy that he has not contributed to the premium of.

We are very up front with the membership and a letter will be issued by the Company Secretary advising that the money has been used to pay their account which is in arrears. 

Another point, we took legal advice on noting members on the insurance policy that had never contributed to the insurance premium. We had the insurance company write to their financial institutions advising them that no insurance cover was in place. (contrary to mortgage acceptance terms) 

We had 4 members who never paid any service charges since signing for their apts and we now have only two... I do belief that our action contributed to their commencement of paying service charges.

Hope that helps some directors of management companies !!!


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## Claimsman

10amwalker said:


> Sorry to give a completely different view on the matter. I am a director of a management company and if a member of the company makes a claim on the block policy and they are arrears, the management company will deduct their arrears and give them the remainder if there is any.
> The cheque is always made payable to the management company and not the individual owner nor the managing agent !!
> 
> The policy is taken out by the management company and why should a member be able to make a claim on a policy that he has not contributed to the premium of.
> 
> We are very up front with the membership and a letter will be issued by the Company Secretary advising that the money has been used to pay their account which is in arrears.
> 
> Another point, we took legal advice on noting members on the insurance policy that had never contributed to the insurance premium. We had the insurance company write to their financial institutions advising them that no insurance cover was in place. (contrary to mortgage acceptance terms)
> 
> We had 4 members who never paid any service charges since signing for their apts and we now have only two... I do belief that our action contributed to their commencement of paying service charges.
> 
> Hope that helps some directors of management companies !!!


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## Claimsman

10amwalker,You shouldnt apologise for raising some excellent points!!

Can i ask, if an apartment owner doesnt pay their management fee, are they expelled from the management company? If they are not, how can a cheque in respect of an insurance claim arising from legitimate damage to their property be with held from them? By virtue of the fact that you have not expelled them, they remain a member of the management company and therefore,part of the insured and as such, benefit from the policy, whether this is fair or not. Surely this is the legal position? If somebody is in arrears on their management fee (for whatever reason) and you withhold payment, are you within your legal rights to do so, or is it a case that you have taken the law into your own hands?

I believe that your point as to why an apartment owner should benefit without contributing to the policy is very valid, but, i fear that by not excluding him from the policy, he is deemed to be included ( i do realise the logistics of excluding him) and therefore, whilst he is a member of the management company, legally, he must benefit from the policy. If there is an outstanding management bill, then this is an entirely seperate matter, which should be dealt with seperately. There may be various justified reasons in the mind of the apartment owner for this. Just because it is expedient from the management agents/companies point of view to with hold an insurance payment and deduct outstanding bills, does not necessarily make it legally correct to do so.

Having said all of that, i do appreciate your position,( and if i was in your position, i would find it difficult to have an issue with your rationale) and maybe if the OP paid his management fees, he wouldnt be in the position that he is now.

My own experience(which has tainted my view on this subject) with these matters related to where the management agents and management companies where being over zealous and without going into it, were less than reasonable.

Your post has clarified some matters for me, and i thank you for that.


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## sunnyside

Ohh that you were my management company!! I have no issue with your points at all, they are reasonable and fair,....but my issue is different.

My management company have deducted monies for 2009 fees. Yet they have not yet issued any fee to anyone for 2009. They have not held an AGM since early 2008 and yet are deducting monies from me. 
They issued no invoice to me for the deductions they made, nor any explanations as to how they arrived at the figure they deducted which is 4 times the previous yearly fee and are won't respond to emails etc.....HELP


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## 10amwalker

Sunnyside,
For clarification: are you saying that no invoice for service charges due for 2009 was sent to you ?
What is the financial year that your management company operates by ?
Do you receive a copy of the budget ( detailed expenditure based on activities) with your yearly invoice ?
Have you checked whether your management company has filed their annual returns, are they up to date with them ?
Have you a copy of your lease that you signed when purchasing ?

You may not like the next bit of advice: Become involved in your management company or if the developers are still the directors become involved with the residents committee. The only way you can bring about change is by becoming involved.

More immediately though: Write to the Company Secretary requesting the date for the AGM for 2009.
Write to the Company Secretary and directors requesting an explanation of how they arrived at the figure ( are you in arrears for several years ?)


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## sunnyside

Wait for it,...

The developers still have not handed over the mgt. company despite many requests over the past 3 / 4 years.
I was on a residents committee for a year but its like hitting your head off a brick wall.
The last AGM was feb 2008, no communication from them since then.
No one has received an invoice for 2009 yet. 
The only thing we know is that they withheld over €3,000 from me with a vague muttering of 2009 fees, yet no communication with me for 4 months or so.

Either way I am sure they are muddying the waters here, to me they are separate issues,..my insurance claim is one thing, the fees for 2009 are another.

i would welcome paying fees for 2009 and welcome them looking after the complex, but they are hiding.

No one is in arrears for the complex, but no one has paid for 2009 because they have not had an AGM, they have not shown us a budget, they have not sent us invoices,..

To the best of my knowledge its 2007 at best since they filed returns.


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## mercman

Had the accounts for the previous years been audited ??  If all the properties in the complex have been sold surely it is down to Majority Rules. Possibly if all the owners form a Residents / Owners Committee it might be more beneficial to instruct A solicitor to act on everybody's behalf and thence reduce the costs for all concerned.


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## Statto

Claimsman said:


> Can i ask, if an apartment owner doesnt pay their management fee, are they expelled from the management company? If they are not, how can a cheque in respect of an insurance claim arising from legitimate damage to their property be with held from them? By virtue of the fact that you have not expelled them, they remain a member of the management company and therefore,part of the insured and as such, benefit from the policy, whether this is fair or not. Surely this is the legal position? If somebody is in arrears on their management fee (for whatever reason) and you withhold payment, are you within your legal rights to do so, or is it a case that you have taken the law into your own hands?


 
If an owner is in arrears they are in breach of the lease that they signed and are therefore not entitled to the benfits provided by the management company. Therefore the management company is entitled to withhold payment. This has been verified by the solicitors of my management company.

I have the utmost sympathy for the OP - clearly you cannot be in arrears for 2009 if you haven't received an invoice. The only question I would have is whether the OP is in arraers on any invoice that has been issued for previous years?


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## sunnyside

Hi all, and thanks for the comments.

It has interesterd me to see the slant that a lot of the comments have taken,..almost looking for fault in what I may have done to explain the behaviour of this mgt. company. I am not being defensive with this remark, just I find it interesing that we almost assume mgt. co's are honourable. I am sure many are, but in this case unfortunately not for me.

To clarify, I am not in arrears. Everyone has paid their 2008 fee.
I nor anyone else of the owners has had no formal contact from the mgt. company / develpers since Feb 2008 , the last AGM.
No bill has been sent for 2009 to anyone. 
Nothign has happened this year at all.

I have 2 issues.
1) They have withheld money sent from an insurance company for my damage. I understand why the insurance sent them the money as their name is on the policy. But the mgt. company withheld a significant portion of the money, claiming it will be for fees in 2009 and promised to follow on with correspondance to clarify the matter. That was 4 months ago,..not a dickybird since despite all sorts of threats.

2) It is my firm belief that my name was also on the cheque sent from the insurance company. But though I never saw the cheque nor obviusly endorsed it, it has been cashed anyway.

So here I am with an apartment that hasn't been finished properly since its leak as I have not got the money from the mgt. company, a tenant threatening all sorts of things and not happy with the apartment, and an insurance company who will not talk to me as I am not the policy holder. They want written permission from the mgt company to speak with me,..but the mgt. company won't even speak to me, so I will not get this letter from them.

Have I any options despite going down the road of a solicitor,...

Thanks all


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## Statto

I would go to a solicitor - I don't see another option. The solicitor should also be able to tell you where you stand in terms of claiming against the management company. I would fear that if the management company is being run as poorly as you suggest there won't be any assets to claim against - so be careful not to spend too much on a solicitor with the idea of claiming your costs also.


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## shesells

But do you mean Management COMPANY or AGENT? I think you mean agent but your mixed terminology only confuses the situation further.


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## sunnyside

I don't beleive I am using any mixed gterminology.
There is no agent.

There is only a mgt company which consists of the original developers because they have never handed over the running of the company / development to us as owners. So we have not been able to appoint an agent or indeed form a mgt company or anything.

They have also not appointed an agent as they are 'running' it themselves.


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## Pan

Sunnyside, whether you owe management fees or not is incidental. They have no right to use that cheque for any other purposes. Bunch of chancers. I'm experiencing the exact same issues. I tried witholding my fees mainly to try & force the mgt co. to come to me. Was blue in the face trying to get them to respond to problems on the development. Like you I too had a claim awarded and yep you guessed it the management company helped themselves to it, not just to deduct my fee for this year but to pay off outstanding arrears to refuse collectors, the man who cuts the grass etc etc. Can they do this ?, legally no but the fact is they did. However I've managed to retrieve half of my money by keeping up a constant barrage of letters, phone calls, solictors letters etc. Time now for me to pay a personal visit. Keep a log of all correspondence, phone calls, get names, become a royal pain in the b*m.


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## shesells

sunnyside said:


> I don't beleive I am using any mixed gterminology.
> There is no agent.
> 
> There is only a mgt company which consists of the original developers because they have never handed over the running of the company / development to us as owners. So we have not been able to appoint an agent or indeed form a mgt company or anything.
> 
> They have also not appointed an agent as they are 'running' it themselves.



Then you miss the point that you are actually a member of the management company and that brings rights and responsibilities. 

My first port of call would be to the CRO website to download all the company info (including contact details for the directors). This will give you audited accounts etc. You can also get the articles of association which will give you info on how to call an EGM etc. There's a small fee for these but it's well worth it.

If you haven't had an AGM in over 18 months then the company is in breach of company law and that has implications for the entire company, including you as a member. To protect your investment you should get active now, it's about more than the insurance claim (though I know that's your immediate concern).


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## sunnyside

PAN - Sorry to say this, but its great to hear of someone else in a similar situation. Am I right in thinking that what they have done is illegal?

SHESELLS - I appreciate your views and do agree that there are broader issues than my immediate concern of the insurance. Its just at he moment thats what I need to concentrate on.

On your point about all of us owners being part of the mgt. company. Is that right?...if the developers have never handed over the building / company to us,...

Thanks


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## purpeller

sunnyside said:


> On your point about all of us owners being part of the mgt. company. Is that right?...if the developers have never handed over the building / company to us,...



Most definitely.  This is absolutely standard.  When I bought, my development was not yet handed over (it can take years for this) but I was given confirmation of being a member of the management company.

Your solicitor should have sent through a certificate from them stating that your name has been added to the management company.  They would have used this to put your name onto the block policy - I don't think the insurance company would have paid out if you were not on the block policy.


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## sunnyside

Thanks.

I would agree with you in theory that I am on the mgt company and thats why the insurance paid out etc. Thats certainly how i thought it worked.

But the insurance company will not talk to me saying that they will only speak with the mgt. company and thats not me,....so I don't know how it can be both ways,..surely the insurance company should speak with me,...but they are firm saying that without written permission from the mgt. company they will not speak to me,....


As an aside I have received correspondance from them, calling an AGM and a bill (which everyone received for 2009 and for 2010) They are giving notice of their intention to resign as directors and have advised us to take over the company.


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## Seagull

Make sure before the AGM that the management company is in good standing with CRO. It could be very pricey otherwise, and the existing directors need to be held accountable for any issues.


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## Manage - ClC

Whay are you not paying your service charge? If all your neighbours decided not to pay where would that leave your apartment block. Bottom line is you are legally obliged to pay your service charge, legally you MUST pay. The Management Companys memo and arts will state that the lessor has an obligation to keep the block in a first class state of repair. The Management Company cannot to this and must ensure it takes all steps neccessary to make this happen. If the Management Agent is withholding this they are doing it for good reason. You should contact the agent regarding the management companies finances, you need to know how the bottom line looks as an owner non payment if service charges caused a large number of problems. As a former property manager, non payment of service charges is in effect shooting yourself in the foot. You are paying into your own management company not into the management agents bank account! Should everyone not pay your asset may decrease in value. Think seriously about not paying your service charge in future. Its NOT worth the hastle!


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## mercman

Manage - CIC, I think you should read the entire posts of the OP and then form an opinion. An Insurance claim has been made and their claim appears to have been robbed by the developers. So there is no point in laying down the law on the rights and wrongs when it appears a one sided approach.


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