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freeholder charging extortionate fee for house insurance

[Deleted User]
[Deleted User] Posts: 0 Newbie
Name Dropper First Anniversary First Post
edited 10 October 2016 at 9:11AM in House buying, renting & selling
Hi All,

Does this sound expensive? I know there are many factors.

Our insurance was £350 per year for all 4 flats. It's a 1920's conversion.

Three 1 bedroom flats roughly 400 sq ft and the other 470 sq ft with a garden of 150 sq ft. When sold 2 years ago all the flats separately they achieved £440000. It was basically bought by a property developer and auction and they gave it a quick spruce up and chucked all the flats on the market.

Our new freeholder have revalued it at £750000(ridiculous)although I suppose this could be the rebuild cost.

Its out of town in Bournemouth in not the greatest area.

They now want £1500 per year between all four of us.

Surely this is ridiculous?

Thanks in advance.
«1

Comments

  • eddddy
    eddddy Posts: 16,409 Forumite
    First Anniversary First Post Name Dropper
    If cover of £750k is mentioned in the policy, that would be the rebuild cost.

    As a leaseholder, you can challenge any service charge - including the cost of insurance. Maybe get quotes from other insurers, to see if the premium is reasonable.


    Take a look at this info: http://www.lease-advice.org/advice-guide/service-charges-and-other-issues/

    Especially section 6.1 - Insurance by the Landlord
  • G_M
    G_M Posts: 51,977 Forumite
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    edited 10 October 2016 at 12:26PM
    The sale/market price is irrelevant.

    You need to know the rebuild cost.

    Either

    * challenge the freeholder and ask him to provide 3 different quotes
    * obtain your own quotes and then challenge the freeholder (assuming they are cheaper!), or
    * start the Right To Manage process and take over the insurance and other management jobs yoursel.

    see also:

    http://www.lease-advice.org/faq/i-am-a-leaseholder-of-a-flat-i-have-received-a-demand-for-a-share-of-the-buildings-insurance-premium-do-i-have-to-pay/
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Name Dropper First Anniversary First Post
    Well I made one call and that was £900(first quote) with a rebuild value of 750k and that was a 5 minute call. They are definitely ripping me off.

    This is Pier mgmt in Essex. They are renowned for there rip off tactics.

    No wonder there the 6th richest directors in Essex. Alan Sugar is no.1.
  • G_M
    G_M Posts: 51,977 Forumite
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    Deleted_User wrote: »
    Well I made one call and that was £900(first quote) with a rebuild value of 750k and that was a 5 minute call. They are definitely ripping me off.
    You don't know that.

    Insurance premiums vary hugely - I've just been looking for a policy for my house and had quotes varying from £145 up to £1985!

    So it is perfectly possible the freeholder has paid £1500.

    However if you dislike the management company, talk to your neighbours and take over!
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Name Dropper First Anniversary First Post
    You must have a nice house GM!

    Anyway I have the insurance document in front of me so have received another quote and that is £766.72.

    Obviously all the details I have kept the same, excesses, perils insured etc...

    It's not the management company I dislike it's the freeholders as they collect the insurance and ground rent separately.
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Same principle. RTM. Don't understand why more people don't do it.

    And yes - it's a nice house thanks!
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Name Dropper First Anniversary First Post
    G_M wrote: »
    Same principle. RTM. Don't understand why more people don't do it.

    And yes - it's a nice house thanks!

    I understand RTM thanks but surely if my lease says that the freeholder arranges the insurance the gain is not that significant or are you saying I can arrange the insurance myself if I RTM it?
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    My understanding is that you could arrange the insurance though I might be wrong. Look at the links I provided!
  • dacouch
    dacouch Posts: 21,637 Forumite
    Name Dropper First Anniversary First Post
    Deleted_User wrote: »
    You must have a nice house GM!

    Anyway I have the insurance document in front of me so have received another quote and that is £766.72.

    Obviously all the details I have kept the same, excesses, perils insured etc...

    It's not the management company I dislike it's the freeholders as they collect the insurance and ground rent separately.

    Did you declare all claims made on any previous claims, it would be fairly unusual for there not to be at least one claim in the last five years on a Victorian conversion.

    Also worth remembering, BH post codes tend to be (Very) prone to subsidence, so premiums tend to be higher than the rest of the country
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Name Dropper First Anniversary First Post
    dacouch wrote: »
    Did you declare all claims made on any previous claims, it would be fairly unusual for there not to be at least one claim in the last five years on a Victorian conversion.

    Also worth remembering, BH post codes tend to be (Very) prone to subsidence, so premiums tend to be higher than the rest of the country

    Thanks @Dacouch,

    BH postcodes are (very)prone to subsidence? This covers the whole of bournemouth?

    I live in the middle of town. Can't see much subsidence next to the local Tesco's..

    Why would it be unusual for no claims in a victorian conversion? I have been here two years and no issue but that doesn't mean you are not right but judging on my previous yearly payment of £350 per annum I doubt we have any major issues including subsidence!

    Cheers anyway..
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