Water leak from a neighbour’s flat – Who pays the insurance excess?

When a flat is damaged by a leak from another flat in the same building, a dispute will usually arise. The manager of the building will often ask the person whose flat has been flooded to make a claim on the building’s insurance policy and pay the excess. However, this often seems unfair. If a leaseholder finds themselves being asked to pay the insurance excess they should consider their options.

Stop The Leak

If you find water leaking into your flat clearly the first thing you must do is stop the leak and identify the cause, as this usually dictates who is to blame for the damage. It can be difficult to stop the leak but the first thing to do would be to find the mains water supply to the flat in question and turn it off. If your building is run by a managing agent you may need to request further assistance from them with regards to contacting the property owner or finding someone to help with identifying and fixing the leak.

Home Insurance

Depending on the wording in the leases, a leak between two neighbouring flats may have nothing to do with the manager of the building who may take the view that the flat owners involved should sort the problem out between themselves. The problem with this is that whilst many people’s home insurance will cover damage to their belongings, the policy may not cover damage to the structure of the premises itself such as the floor, ceiling and walls.


If your neighbour is found to be negligent (i.e. leaving the bath running) and the damage is not covered by insurance or it is not possible to make a claim, the person affected would have to consider making a small claim against their neighbour. If a small claim is contemplated it is important to note that the person affected has a duty to mitigate their losses, which means they must try to reduce the damage for example by drying out rugs and other items that could be further damaged by damp conditions. They should also keep receipts for any costs incurred. The responsible party should be notified at the outset that they could be liable for your costs. If they refuse to cooperate they could face further liability if the damage becomes more severe as a result.

Mutual Enforceability

Even if the leak was not caused by the neighbour’s negligence, if it was caused by their failure to keep their flat in repair, the affected leaseholder is likely to have a remedy against them. Under the terms of the lease the landlord may be obliged to take action against other leaseholders in the building who breach the terms of their leases (‘mutual enforceability’). Unfortunately the landlord’s obligations are usually dependent on them being indemnified against any legal costs that cannot otherwise be recovered from the leaseholder in breach, which could make this an expensive option for the leaseholder who has suffered the damage.

Buildings Insurance

The easiest way to deal with a leak is for the manager of the building to allow a claim to be made on the building’s insurance policy. The claim should be made by the person in whose name the policy is kept, or, if everyone’s name is noted on the policy, by the person who was responsible for the leak. Hopefully the wording in the leases will allow the excess to be passed back to all of the leaseholders through the service charge. Where the leases are not clear on this point it is considered that the excess may be recovered through the service charge as part of the cost of arranging the insurance.