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Flood Damage: Where do Owners, Landlords and Tenants Stand?

he names of recent storms have nearly become household names too. The frequency of storms has been increasing and recent floods, such as in Midleton, remind the public of just how much damage and loss they can cause. Sums like € 100,000 have been mentioned to cover repairs at a minimum.

Owners of Houses, Shops:

Most owners will seek cover, sometimes under a combined policy, for compensation for damages and/or loss of business created by storms and floods, such as the one that caused so much destruction in Cork recently.

The problem with obtaining such cover is that it can often be refused or withheld if the insurance company sees the property to be in a high-risk area. How easy will it be for those shop owners in Cork to get flood insurance next year? Insurers prefer to insure against a contingency and not against a local flood, which in some areas has almost become an annual event.

Some coastal areas in Dublin are declining flood insurance despite it being several decades since any flood occurred. Owners and brokers will have to trawl the market here and, in the UK, to obtain flood cover, which is often quite expensive.

Landlords & Tenants of Houses and Shops:

Tenants of either shops or houses usually have a lease which, among other matters, will set out clearly which of the parties is responsible for maintaining and repairing their premises and taking out insurance to cover the risk of storm and flood damage.

Most shop or office leases are for 15 or 20 years and called Full Repairing and Insuring leases because the tenant under such leases has the obligation to fully repair his premises and to take out insurance for fire and flood damage. In addition, most sensible tenants will take out contents, public liability, and loss of business cover.

It must be said that shopping centres vary in their layout as do the repairing and insuring provisions in these leases. These provisions are set out in legal language that is sometimes opaque, but these clauses are very important. You should, therefore, ask your solicitor to clarify them for you and to advise what exactly your repair obligations extend to and what type of insurance cover you should obtain.

You should also insist as a tenant that any proposed lease gives you a rent-free period while your shop or premises are being repaired. The landlord will usually have insurance against loss of rent with the result that neither party will be out of pocket.

It is important not to overlook having any contents or furniture insured as these can be easily destroyed in a flood and quite separate from any insurance held on the building itself.

Houses and apartments that are let out for a short period of time such as a year, are a different category.  In these cases, the landlord will usually arrange all the insurances himself against fire, storm, and flood while the tenants are responsible for arranging contents cover on all their possessions.

The frequency of flood events and the cost of repairs is so onerous these days that it is vital this is covered by flood insurance; however difficult this is to obtain.

It is, therefore, important that tenants and owners know exactly who is liable to repair the property and who is to obtain or pay for the necessary insurance. It is much more advisable to have these items clarified before rather than after your premises are damaged by a flood or other weather event.

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