© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
The most common insurance claim in blocks of flats involves water leaks. It is perhaps an accepted hazard of high-density, multi-occupancy, urban communal living. However, as this case study shows, in extreme cases water leaks are a serious problem damaging both property and wealth.
Imagine a typical new build with 80 plus units constructed in the last five years, in the midst of the housing construction boom. It could be just one of many attractive new build developments that seduced purchasers with aspirations of flat living.
The first catastrophic water leak occurred about three years ago. Allegedly, caused by a bath trap that had uncoupled itself, it affected 20 flats and an insurance claim of over £1m, largely because residents had to be re-housed in alternative accommodation. At the time, there was a £50 excess on the insurance policy per flat, and the former landlord, picked up the tab for this. There have been at least three other water leaks since, affecting a handful of flats and caused by burst pipes, damaged ball valves and a washing machine. Unfortunately, some flats have suffered multiple times. Meanwhile, the insurance excess for water leaks jumped to £150 per flat but as the building continued to leak, the insurers refused to cover water leaks as a risk altogether.
The water leaks themselves may be unremarkable but for the design of the building, which appears to conceal the problem. The block was constructed with a “floating floor”, creating a void between the concrete and the chipboard surfaces underfoot. The walls are made of plasterboard and hit the underside of the slab. So, when water leaks it is hidden for a period of time within the fabric of the building. In winter, when residents keep their heating on for longer, this also creates perfect conditions for mould to proliferate causing secondary problems for the flat owners. Usually, the first sign of a leak is when water starts dripping into the underground car park. This sparks an urgent hunt for the leak’s origin, often involving further destructive work to residents’ flats.
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The current landlords commissioned an independent report into the problem, which recommended the installation of a water moisture sensor and remedial work to the pipework costing at least £50,000. This remains under consideration.
Meanwhile, the value of the flats has probably plummeted, making properties virtually unsellable until this problem is resolved - if it ever can be.
To that end, the managing agents concerned are negotiating on behalf of the flat owners with the insurers to reinstate the excess on the policy, although at present the insurers are offering £50,000 per flat. Meanwhile, the design and development of the building is subject to separate litigation as the insurers attempt to recover their losses. Altogether a salutary tale, and perhaps a portent to potential ‘new build’ property maintenance issues of tomorrow.
Margaret Guy is Head of General Practice at Campsie Property Management.