Firms ''must learn from flooding issues'' - commercial mortgages

29 August 2007

Firms in the Midlands should take heed of the issues raised by the recent flooding in the area to ensure that they are not caught out next time, it has been advised.

With many companies having suffered physical damage as a result of high water levels, it is important that both tenants and landlords holding commercial mortgages are aware of exactly who is responsible for the costs, the Birmingham Post has reported.

Shilpa Unarkat of law firm George Green told the paper that specific safeguards against flooding were needed.

"Tenants of commercial property can be especially badly affected. If their lease does not oblige their landlord to insure against flood risk and the landlord has not obtained insurance cover for flooding, the tenant will have to repair any damage," she commented.

"In addition rent suspension provisions in the lease will not apply for flooding unlike other cases where rental payments would be suspended while the premises cannot be used or occupied as a result of damage or destruction by insured risks," Ms Unarkat added.

The cost of the damage caused by this summer''s floods is estimated to stand at £3 billion.