Insurance claim settlement

[desamax]

hi all, we have had an Building insurance claim settled with the insurance co on damage to our lock up shop. We are also in dispute with the freeholder over the services charge and have requested a breakdown of the charges many times, and have been legally advised to withhold the payment unitil the breakdown is forthcoming. On the claim we were to present the contractors invoice and the insurance co would then pay the VAT element,
However I have been informed today that the freeholder has requested that this is paid to them to cover the disputed service charge account. As this is the vat element . Can anyone tell me if they can legally do this?
Thanks

 

[KAC]

Is it your buildings Insurance Policy or the freeholders?
Who instructed the contractor?

 

[desamax]

Thanks, it’s the freeholders building insurance that all leasholders in the mixed use unit pay a contribution towards. We was paid out by the insurance to our account via transfer less the vat to instruct our contractor to carry out the works. The vat would be paid on completion and on production of the vat invoice. That is what we have done. The freeholder has requested the vat element be paid to them to cover the disputed service charge account.
Thanks again
Any advice is appreciated

 

[Mr D]

So you have money owed by you, there is money owed to you that the freeholder knows is due at some point.
He wants to use payment to cover debt owed to him. What's the negative aspect here? Money you have is the same either way?

 

[desamax]

The aspect is the freeholder has been over charging. And won’t supply a breakdown of charges. The amount outstanding from the insurance co is for the vat on the works done owed to our contractor . If the freeholder supplies the breakdown we will willingly pay what’s due.

 

[Mr D]

The aspect is the freeholder has been over charging. And won’t supply a breakdown of charges. The amount outstanding from the insurance co is for the vat on the works done owed to our contractor . If the freeholder supplies the breakdown we will willingly pay what’s due.

So if the debt you owe the freeholder was say £1000 and the insurer paid £1000 to the freeholder what position do you end up in out of pocket?
You still have the £1000 you haven't paid out.

 

[desamax]

If only it was that simple, we have been charged for items that we don’t have to contribute to and also have be charged way over the % stated in our lease. We have had a copy of the breakdown issued to a resident leaseholder that is conflicting on the charges. The account needs investigating. I would like to know if it’s legal to take the vat element from a third party debt.
Thanks

 

[KAC]

I think you may well need paid for legal advice from someone in possession of all the facts.
How much is involved?

 

[desamax]

Had some advice and apparently it’s not legal to take the vat element that was agreed by all parties to be payed to the contractor via whatever means. Maybe this will encourage the freeholder to issue S/C accounts so we can check what we legally owe and pay. Unless they are hiding something. ?

 

[Mr D]

Had some advice and apparently it’s not legal to take the vat element that was agreed by all parties to be payed to the contractor via whatever means. Maybe this will encourage the freeholder to issue S/C accounts so we can check what we legally owe and pay. Unless they are hiding something. ?

If your actions so far haven't caused him to issue S/C accounts then what suggests he will issue them in future?

Has he got a contract signed by you?

 

[KAC]

Had some advice and apparently it’s not legal to take the vat element that was agreed by all parties to be payed to the contractor via whatever means.

The trouble is that possession is 9/10ths of the law.and apparently the freeholder has the money.
Who is going to commence proceedings against the freeholder?
Was it you or the freeholder who placed the order for the building work to be done?
Again how much is it as that should influence the outcome?

 

[kulture]

hi all, we have had an Building insurance claim settled with the insurance co on damage to our lock up shop. We are also in dispute with the freeholder over the services charge and have requested a breakdown of the charges many times, and have been legally advised to withhold the payment unitil the breakdown is forthcoming. On the claim we were to present the contractors invoice and the insurance co would then pay the VAT element,
However I have been informed today that the freeholder has requested that this is paid to them to cover the disputed service charge account. As this is the vat element . Can anyone tell me if they can legally do this?
Thanks

I have quoted the entire first post as some replies seem to assume something that is not here.

The insurer has a contract with the freeholder as the freeholder seems to be the policyholder, however you say that you have the agreed claim on the insurance policy. So I would suggest that you contact the insurance company and remind them of the detail of the agreed claim and request that the monies are paid to the builder as agreed. Say that the dispute between you and the freeholder is a separate matter and the builder should not be made to suffer in this way.

 

[desamax]

Hi again we was advised to basically do what Kulture posted and have done. Our lease state the freeholder should supply audited service charge accounts every year. There is an dispute to arbitration clauses also. That will be the next step if they are not forthcoming. The vat bill was 10k.

 

[KAC]

With 10k at stake you should be discussing this with a solicitor, maybe the one who approved the lease. If the balance of the insurance claim is/has been paid to the freeholder, I can't see you settling this without at least the threat of litigation .

 

[kulture]

Can you clarify where the money is. Has it been paid to the landlord or does the insurer still have it? Also who contracted the builder, you, the landlord or the Insurer?

Simply put, the builder will sue for non payment the person or company with whom they have the contract. They are not going to sit around whilst this dispute is playing out.

If you hold the contract with the builder, what contract (written or verbal) do you hold with the insurer?

I would definitely talk to a solicitor, but I would also suggest you clarify for them the actual legal contractual position.

If the contract is between the builder and the insurer, then stay out of the way.

 

[desamax]

As far as I know the vat is still with the insurance. The loss adjuster has stated that a caveat was issued , this we have no knowledge of. Our complaint has be escalated to senior level in the insurance co. Our view is we instructed the contractors with a verbal agreement on the understanding that payment was forthcoming as agreed, as an up front payment then on completion and production of a vat invoice the vat would be payed. (At no time was a caveat ever mentioned)
The freeholder only need to send us S/C breakdown so we can check for any errors or overcharges. Then we will glady pay what’s owed.
If we have to take the S/C matter to arbitration. Would we be awarded all cost If proven in our favour??
Has anyone been down this road ?

 

[Mr D]

Sounds like the caveat has been done since the initial agreement then.

 

[desamax]

My Assessor is not aware of any caveat, this could lead to a doctrine of equitable estoppel. if they withhold the payment.

 

[Mr D]

So loss adjustor is aware of it and assessor is not. Which of them is involved with the admin and payment?

 

[desamax]

The Adjuster made us the offer.

 

[Mr D]

So what is the assessor's role in the admin and payment?

 

[desamax]

The loss adjuster Is appointed by the insurance co. The loss assessor is instructed to act for us by us. If you have a large claim Id recommend having an assessor on side.

 

[Mr D]

So the person you instruct didn't know about something the person appointed by the insurance company (who presumably have the caveat) did?
Does the assessor have access to everything at the insurance company?

 

[desamax]

The Assessor negotiates on our behalf and advise us and in this case got us 40% more in settlement to do all the repairs. As I stated earlier the insurance stated they would pay the vat on production of the final invoice. But they changed their tune when the invoice was produced. Stating the caveat that both my Assessor and I were unaware of.
Adjusters try to get the lowest payout for the insurance co. The Assessor will get the best deal for the claimant. Via neogation and the settlement is a contract.

 

[KAC]

Do you have a contract with the insurer as a result of the negotiations with your Loss Assessor? Does it say anywhere in that contract, if it exists, that the insurer will make the payment to you rather than to the freeholder who is their insured?

 

[desamax]

The freeholder gave permission for the payout to be awarded to us. We are endorsed on the policy. And pay the premium along with the other leaseholders. We were also told by the freeholder yo liase with the insurance co from the offset.

 

[KAC]

Do you have that permission in writing?
Presumably you pay the premium to the freeholder and not to the insurer?

 

[desamax]

The permission was signed by the freeholder the insurance co have that, otherwise I would not have received the initial payment. All corespondents is well documented. A complaint has been made, we are awaiting the outcome.
We are confident. My issue is now with the freeholder as we have not received a clear breakdown of charges for a few years. Would anyone know if dispute resolution services can award cost ?