NSW Water damage to property after remediation

Hello Property Chatters,

I need some urgent advice about what to do with the damage in my rental property.

Background: We purchased a townhouse in the Hills District back in 2017. A few months before settlement, the previous owner had claimed for insurance as the water of a recent storm had leaked from the upstairs balcony, down to the lounge room ceiling directly below. The builder appointed by Insurer X provided the scope of work which included proper water proofing of the balcony, completed the work and provided warranty on the job. All this was done prior to settlement.

We leased the townhouse to the current tenant in July 2017. Then in February 2019, a storm hit and some water came through the balcony and leaked through the balcony door and down the ceiling lights of the lounge room ceiling. We reported this to strata and at the time similar damages were experienced by 2 other townhouses in the complex. A claim was put through by the strata manager collectively in May 2019 and the claim on our townhouse was denied in August 2019. The insurer said the builder appointed by Insurer X should cover this work as it is related to the same previous issue.

From August 2019 to Feb 2020, our property manager has been chasing the builder continuously, however did not receive an answer from him. Then the massive storm hit the weekend 8-9 Feb 2020. The ceiling and the floorboards were badly damaged by water. Our property manager finally got a hold of the builder, and he did a quick inspection of the townhouse last week. He suspected that the water proofing under the balcony door was not done properly, only 1 half of the door was sealed. However this won’t be certain until they actually lift the doors and then do a thorough inspection. The inspection is due to be completed in 2 weeks’ time.

In the meantime, our tenant has asked for compensation for the inconvenience, and our landlord insurer EBM responded that they won’t be covering for this nor any loss of a rent reduction. EBM would only cover if they deem the home unliveable and they needed to vacate the property for a period of time.

Questions:

1. If the inspection determines that the water damage is due to inappropriate water proofing under the balcony door, is the builder obligated to also fix up the damaged areas (ceiling, ceiling lights, floor coverings)?
2. If the builder refuses to rectify the ceiling, is this something strata insurance would cover?
3. After the builder does a thorough inspection and determines the water damage is not due to the work he has previously completed, what should we do next? Do we need to do an independent building inspection to confirm the builder’s inspection results?
4. Is there any other way to contest EBM’s response?
5. What is a reasonable compensation to offer to the tenant?
6. What other things would you recommend us to do in this situation?

Thank you so much for your help!

 

I would be contacting the insurer concerning the warranty on the building damage repair which doesnt end with a change of owner. The insurer may have a bit of pull to have the work completed to standards and have the clout to tell the builder to assist. Most insurers consider repairs have a ""lifetime warranty"" or similar.

Seek legal advice. What does the EBM policy actually cover ? Yes many policies only pay when a home is not habitable and every insurer has VERY different definitions of this as I heard on TV yesterday. eg Can they use the kitchen and bedrooms etc ? Ifa reasonable person cant define what is covered then you may have grounds to take on the claim refusal.

 

there is a rep from EBM after Brettc on the forums here, just as another avenue for enquiry