Work delays' loss of rent
Question from Rachael updated on 14th October 2015:
The apartment block we own an apartment in is waiting to start a refurbishment due to being leaky. Our tenant moved out after the first notice for the work start date was given last year, but there has been delay after delay since. We haven't been able to rent the property because of this. The apartment has a body corporate who is liaising with the contractors.
Who is responsible for our loss of rent due to the delays and can we claim any loss of rent? There is no personal insurance on the apartment. Can we invoice the body corporate for our loss - as we are governed by them and have complied with the requirement to have the building empty since the original start date?
Our expert Myles Noble responded:
Generally, this type of event is not covered by insurance so it is unlikely that the body corporate has loss of rents cover available. However, that would be my first question to the body corporate secretary.
From the information you have given it would appear that by complying with the body corporate request to have the apartment vacated by a certain date you had a reasonable expectation that repairs would commence on or about that date. The delays have prejudiced your ability to obtain rental income and I understand your desire to seek recovery for these amounts.
However, without knowing the cause of the delays in repairs starting, it is hard to ascertain whether the body corporate has been negligent and is therefore liable for your loss of rent.Myles Noble is head of claims and earthquake response for Crombie Lockwood. He also holds various advisory board positions in the insurance industry.