Firestarter - fire damage strict liability for an uninsurable risk!

Posted: 30/10/2018

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If your child has just set off  to University for the first time, you may be shocked by how quickly they tell you they are looking for a house to share in their second year. All the good house and flat shares, they tell you, will be gone before Christmas.

I have looked at a few AST’s produced by estate agents for student lettings and one or two have an absolutely shocking fire damage clause which says the following (or something like it):

“The tenant is to take reasonable steps to keep the interior of the property and the fixtures and fittings in the same decorative order and condition throughout the term as at the start of the tenancy, as noted in the Inventory and schedule of condition.

The tenant is not responsible for the following:

• fair wear and tear;
• any damage caused by fire unless that damage was caused by something done or not done by the tenant or any other person permitted by the tenant to reside, sleep in, or visit the property;
• repairs for which the landlord has responsibility (these are set out in schedule 2 of this agreement);
• damage covered by the landlord's insurance policy.

The section in bold above is my emphasis. If I were being charitable, I would say that whoever drafted this clause has tried to over complicate what should be a relatively straightforward obligation. It has the effect that the tenant is responsible for fire damage to the property caused by “something done or not done by the tenant” and so covers every single possible cause of fire. For example, an electric surge that causes a fire is something not done by the tenant, however, it is arguable that the tenant is liable under the wording of that clause. And the liability is strict. The clause is unfair as the tenant can’t insure the building for fire as the landlord already has that insurance.  So under the terms of this clause the tenant has full responsibility for all fire risk to the building against which he or she cannot insure. 

I have not seen this clause litigated before a court, although I have been involved in a similar case which settled. Here it was alleged that the tenant was liable for fire damage, to a flat and to the common parts of the building, under a very similar clause to this one. The tenant in that case was a company, which had rented the flat for use by employees who were also family members.  And because the tenant was a company it did not have the benefit of the Unfair Terms in Consumer Contracts Regulations. 

Additionally, if the landlord has already insured for fire risk you would argue that the clause is redundant, as it specifically excludes “damage covered by the landlord’s insurance policy”. In my case the landlord’s insurance policy did not cover damage to the common parts of the building in which the flat was situated and the tenant paid out several hundred thousand pounds to the landlord in respect of that damage. 

In my view this is a horrible and unfair clause. If you should come across something similar in your tenancy do contact me or a member of the team and we will be delighted to assist you.

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