Apartment Leak - Developer Gone Bust

I live in a second floor apartment of a 4 floor apartment block and had an issue with a large leak about 3 years ago. The developer resolved it eventually after 8 months of hassle and stress saying firstly it was a problem with the roof and secondly it was a problem with the flashing/sill on an apartment above me. I thought it was totally resolved but unfortunately 3 years later its back after the heavy rain about 2 weeks ago. The developer has gone bust. The management company say they don't know who is going to pay for it this time?? Who is required to repair it and what are my rights? Should I employ a loss assessor/adjustor to get it resolved and to work on my behalf? Any advice appreciated.

Elizabeth7 said:

The management company say they don't know who is going to pay for it this time?? Who is required to repair it and what are my rights? Should I employ a loss assessor/adjustor to get it resolved and to work on my behalf?

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No I wouldn't advise you hiring a loss assessor yet. Are there problems with the management company? Don't you pay a thing called block insurance that should cover for things like this? I'd go back to the management company and press them on whether you are covered by the block insurance company.

Also presumable you have your own insurance, why don't you telephone them and see what they say. You'll have a much better idea after all this for who is liable for what.

Elizabeth7 said:

I live in a second floor apartment of a 4 floor apartment block and had an issue with a large leak about 3 years ago. The developer resolved it eventually after 8 months of hassle and stress saying firstly it was a problem with the roof and secondly it was a problem with the flashing/sill on an apartment above me. I thought it was totally resolved but unfortunately 3 years later its back after the heavy rain about 2 weeks ago. The developer has gone bust. The management company say they don't know who is going to pay for it this time?? Who is required to repair it and what are my rights? Should I employ a loss assessor/adjustor to get it resolved and to work on my behalf? Any advice appreciated.

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You need to find out what is causing the damage as the block insurance will only cover damage resulting from insured risks covered by the policy. If it is simple poor construction or inadequate roof detailing then there will be no cover and no insurance company will respond. If you find out it is covered then you could employ a loss assessor (loss adjuster works on behalf of the insurance company) but it would depend on the value involved.

The management company will have to foot the bill which means the members will have to foot the bill. Homebond for leaks only covers 3 to 5 years from when the building was completed and insurance never covers building defects. Get an assessor and builder in to determine where the problem lies and get it costed up and then based on the funds the company has either look to use sinking fund reserves or hold an EGM to get members to pay up an emergency fee to cover the costs.

Apartment Leak

Thanks for the advice. I phoned the management company today. They told me they are getting someone in to have a look at it and do 'remedial work' although when that will be I don't know. I was told its a leak from a balcony 2 floors up and not the roof. I don't know how the water tracks down to me. Its bizarre. I had Homebond in initially and they were totally useless. From the beginning I have felt I would have had more rights with a leaking pair of shoes!

Elizabeth7 said:

From the beginning I have felt I would have had more rights with a leaking pair of shoes!

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You would!

The original Homebond is useless as a guarantee-it guarantees very little, and there are limits on payouts, nor was it regulated as an insurance product.

See what the mangagement company says. If its where I live, there is a good chance its from the roof, which is like a tea bag, but worse! (You can see and count all the holes in a tea bag!)

I suppose it depends what was damaged as to what you do.

I live in a duplex (ground and first floor) with an apartment above me. I came home to find my kitchen ceiling had caved in from water from the upstairs apartment (came down the back of the shower and that was the first water plaster ceiling it came to). I put all the onus on the management company, and claimed through the block policy. Luckily I had very little contents damage so didn't claim on my own policy.

I will say I did employ a loss adjuster (who works for you) (an assessor works for the insurance company) and it was well worth the percentage.

amtc said:

I will say I did employ a loss adjuster (who works for you) (an assessor works for the insurance company) and it was well worth the percentage.

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Loss adjuster works on behalf on insurance company.
loss assessor is appointed by you and paid by you

amtc said:

and it was well worth the percentage.

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This is a very global statement as it comes down to the actual extent of damage, and the abilities of your assessor (given that a very high % of regulated assessors have no construction qualification)

In many cases a good builder will do as good a job for no fee.

As stated by kkelliher, if its from a defect to the roof or poor design/poor work etc, its not covered by the block policy. The policy covers storm damage, fire (usual insurance risk).

Ultimately, fixing a defective roof or building fabric is a Mgt Co issue. Whether it has the money to fix it or not is a different matter. Such repairs can be very expenisve to do right.

People living where I do, have had leaks from the roof for years (2007 onwards) and its only now that some of the issues are being addressed. However, only in one block, as there is not the money to do all of them....!!!

You should also be aware that the Mgt are only responsible for the repair to the roof/common area. Any damage to your unit is not their responsibility and will fall on you to fund. Again the block policy wont cover that.

owners can claim on the block policy for their own areas (the demised property) under the terms of 'consequential loss' typically. However, for leakage the excess can be high and it only covers what was installed when the property was bought like a fitted kitchen or plasterboard. No contents.

edit: also bear in mind that if a property is unoccupied for 90 days or more then flooding and water damage is often excluded. As many apartments can be vacant for 12 weeks at a time this could totally exclude a unit from any claim except for fire and storm.

If the fault was from an internal area like a pipe in a demised property area then there may be diminished potential to make a claim as the fault lies with a privately owned element that was potentially not maintained properly. If the companies property is not affected there may be no grounds to make a claim.

People often ask who pays the excess. The answer is no one. The company only pay out for the difference between the repair and the excess. If the repair bill is 10k and the excess 5k then the insurance pay out 5k. Either the company or the owner pay the difference. There is an insurance company that provides excess insurance that will pay out the excess in the case of a claim. Maybe worth looking into where block policies have very high excesses.

Apologies I knew there was a difference between each and thought I had got it right.