We’ve had a spate of water damage incidents recently where the property has been empty for some time.  Once a property is unoccupied for 120 days it is no longer covered by our buildings insurance (which we are responsible for placing under the terms of the lease) so when these incidents happen we are getting a lot of complaints when the insurer rejects the claims.

This has been a particular issue for retirement flats when properties are standing empty for some time when the leaseholder has gone into care, there are delays with probate, or there is simply a limited re-sales market and they can’t sell.  There are also occupancy restrictions in the lease and sub-letting is normally prohibited which precludes anyone else being able to occupy on a temporary basis.

We’ve struggled to reach agreement internally on what, if anything we should be doing about this.  Our legal/insurance teams feel we are fulfilling our obligation by providing the normal buildings insurance and complying with its terms is the leaseholder’s responsibility.  If they have just gone on holiday for 6 months I would agree but that doesn’t account for the leaseholder being incapacitated/deceased.

Unoccupied property cover is available but is expensive and if we were to obtain it I think we’d struggle to recharge the cost v the service charge.  We’ve discussed whether we should advise leaseholders/their representatives to obtain it themselves but think they may not hold an insurable interest if it is our responsibility under the lease. 

Is anyone else experiencing similar issues and has found a solution?