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OK found out that seller (ground floor flat) has unlimited (premier) building insurance from M&S.
What happens if the whole house falls down? Lets say it costs X amount to rebuild ground floor which as per the claim from premier policy, insurer would pay but would such insurance also rebuild the first floor even if there was no insurance taken by first floor flat - because that's how building looked like before i.e. 2 floors not just ground.0 -
Can someone clarify above for me please?
Also if lease of both joint freeholders says below,
"At all times during the said time to insure and keep insured the building in the joint names of the lessor and lessee and any other person or institution having an interest therein in the full replacement value thereof..."
am I correct in saying it definitely means both freeholders insure as a block and not separately?
If yes, I have 2 questions..
1. Would insurance bought separately be actually of no use because lease asks to insure jointly? Is there a relation in two to work from insurer's standpoint?
2. If I buy contingent (which is actually to cover in such shortfalls) insurance along with insurance for my flat, would they both be actually of no use because we are not obeying the lease?0 -
What does the policy cover?OK found out that seller (ground floor flat) has unlimited (premier) building insurance from M&S.
What happens if the whole house falls down? Lets say it costs X amount to rebuild ground floor which as per the claim from premier policy, insurer would pay but would such insurance also rebuild the first floor even if there was no insurance taken by first floor flat - because that's how building looked like before i.e. 2 floors not just ground.
* the building, or
* the flat
If just the flat, then the insurer will not pay to reinstate the whole building.
I can't answer 2 above."At all times during the said time to insure and keep insured the building in the joint names of the lessor and lessee and any other person or institution having an interest therein in the full replacement value thereof..."
Who does this clause apply to? The freeholder or the leaseholder? (I'd guess the freeholder - hence my earlier advice to contact the other joint freeholder)
am I correct in saying it definitely means both freeholders insure as a block and not separately?
See question above.
If the Freeholder must "at all times during the said time.... etc" then he (yes, the 'freeholder' is a single legal entity despite there being 2 people) must insure the building as a block.
If yes, I have 2 questions..
1. Would insurance bought separately be actually of no use because lease asks to insure jointly? Is there a relation in two to work from insurer's standpoint?
It would not be of no use, but creates problems. Both policies would in theory be valid, though there can be difficulties in practice.
The 2 insurers might argue about who pays how much.
One (or both) might claim there is double insurance (eg common areas) and refuse to pay for those.
They might each claim their cover is for the flat in question but not the common areas (which could be uninsured).
There's a real risk of huge delay in rebuilding while they squabble, and a real risk of not getting the full cost reimbursed.
2. If I buy contingent (which is actually to cover in such shortfalls) insurance along with insurance for my flat, would they both be actually of no use because we are not obeying the lease?
As a joint freeholder you should ensure a single policy covers the building.0 -
It would not be of no use, but creates problems. Both policies would in theory be valid, though there can be difficulties in practice.
The 2 insurers might argue about who pays how much.
One (or both) might claim there is double insurance (eg common areas) and refuse to pay for those.
They might each claim their cover is for the flat in question but not the common areas (which could be uninsured).
There's a real risk of huge delay in rebuilding while they squabble, and a real risk of not getting the full cost reimbursed.
I doubt it's a huge problem given that the same insurers seem to manage in Scotland, where flats are freehold and it's commonplace for each flat to have its own policy. The relative interests would be determined by the titles.0 -
What does the policy cover?
* the building, or
* the flat
If just the flat, then the insurer will not pay to reinstate the whole building.
I can't answer 2 above.
As a joint freeholder you should ensure a single policy covers the building.
Thanks.
-That's taken from ground floor flat lease (the flat in question). Same clause is there in first floor flat's lease as well. I'd agree with you that it applies to both lessors (2 leases) = joint freeholders.
"Lease is made between lessor and lessee, whereas Lessor is the freeholder of the dwellinghouse referred as "Building"..
The lessor hereby demises unto the lease ALL THAT the flat on ground floor of the building...."
- FYI, there are no communal areas and entrance to both flats in separate.
- The insurance doc from seller doesn't say building or flat but has address of ground floor flat only (Building number with letter A). First floor has just the building number on it.
- I've asked my solicitor to ask seller to provide us co-freeholders details to be able to discuss the possibility of having joint insurance. I feel that because seller bought the flat in cash and has "unlimited cover" insurance, they thought we are worrying for no reason and delaying the transaction. For this reason they probably thought why should they discuss this with co-freeholder in first place having such insurance policies available which we can buy. I hope they either arrange for his insurance copy to be shared with us or us speaking to other freeholder directly (best!).0 -
Its hard to get quick responses from other co-freeholder it seems.
Can I check
- if I can buy a block policy myself to cover whole building being joint freeholder? Would I need some sort of consent from other freeholder ? I'm thinking to seek costs to be divided later if he agrees.
- assuming he has separate insurance for first floor flat, would it be a problem if he is dual insured as a result of me taking out block of flats policy?
- first floor flat which he owns is tenanted. Can he go ahead and make claims without my permission if he wants to under the block policy? I'm concerned that unreasonable / small claims might make it expensive to insure in future apart from having to shared excess for claims possible? Could this be a con of insuring jointly?0 -
Update - Co-freeholder's policy received. Its landlord's insurance product policy from endsleigh, with adequate building's insurance of 1 Million (first floor flat is let out).
Bought my insurance separately for now. Exchanged contracts. Would be looking into joint block policy soon after completion. Contact established with co-freeholder. Thanks.0
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