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    • skidderbrown
    • By skidderbrown 10th Oct 16, 9:09 AM
    • 264Posts
    • 69Thanks
    skidderbrown
    freeholder charging extortionate fee for house insurance
    • #1
    • 10th Oct 16, 9:09 AM
    freeholder charging extortionate fee for house insurance 10th Oct 16 at 9:09 AM
    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.
    Last edited by skidderbrown; 10-10-2016 at 9:11 AM.
Page 1
    • eddddy
    • By eddddy 10th Oct 16, 9:22 AM
    • 3,852 Posts
    • 3,485 Thanks
    eddddy
    • #2
    • 10th Oct 16, 9:22 AM
    • #2
    • 10th Oct 16, 9:22 AM
    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
    • By G_M 10th Oct 16, 12:22 PM
    • 37,080 Posts
    • 41,030 Thanks
    G_M
    • #3
    • 10th Oct 16, 12:22 PM
    • #3
    • 10th Oct 16, 12:22 PM
    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/
    Last edited by G_M; 10-10-2016 at 12:26 PM.
    • skidderbrown
    • By skidderbrown 10th Oct 16, 2:23 PM
    • 264 Posts
    • 69 Thanks
    skidderbrown
    • #4
    • 10th Oct 16, 2:23 PM
    • #4
    • 10th Oct 16, 2:23 PM
    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
    • By G_M 10th Oct 16, 2:48 PM
    • 37,080 Posts
    • 41,030 Thanks
    G_M
    • #5
    • 10th Oct 16, 2:48 PM
    • #5
    • 10th Oct 16, 2:48 PM
    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.
    Originally posted by skidderbrown
    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!
    • skidderbrown
    • By skidderbrown 10th Oct 16, 3:04 PM
    • 264 Posts
    • 69 Thanks
    skidderbrown
    • #6
    • 10th Oct 16, 3:04 PM
    • #6
    • 10th Oct 16, 3:04 PM
    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
    • By G_M 10th Oct 16, 3:09 PM
    • 37,080 Posts
    • 41,030 Thanks
    G_M
    • #7
    • 10th Oct 16, 3:09 PM
    • #7
    • 10th Oct 16, 3:09 PM
    Same principle. RTM. Don't understand why more people don't do it.

    And yes - it's a nice house thanks!
    • skidderbrown
    • By skidderbrown 10th Oct 16, 3:13 PM
    • 264 Posts
    • 69 Thanks
    skidderbrown
    • #8
    • 10th Oct 16, 3:13 PM
    • #8
    • 10th Oct 16, 3:13 PM
    Same principle. RTM. Don't understand why more people don't do it.

    And yes - it's a nice house thanks!
    Originally posted by G_M
    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
    • By G_M 10th Oct 16, 3:19 PM
    • 37,080 Posts
    • 41,030 Thanks
    G_M
    • #9
    • 10th Oct 16, 3:19 PM
    • #9
    • 10th Oct 16, 3:19 PM
    My understanding is that you could arrange the insurance though I might be wrong. Look at the links I provided!
    • dacouch
    • By dacouch 10th Oct 16, 8:23 PM
    • 19,743 Posts
    • 12,111 Thanks
    dacouch
    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.
    Originally posted by skidderbrown
    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
    • skidderbrown
    • By skidderbrown 10th Oct 16, 8:35 PM
    • 264 Posts
    • 69 Thanks
    skidderbrown
    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
    Originally posted by dacouch
    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..
    • WiseOldOak
    • By WiseOldOak 17th Nov 16, 3:09 PM
    • 1 Posts
    • 0 Thanks
    WiseOldOak
    Great to find this post, it has given me a glimmer of hope! I am in exactly the same situation, I live in a converted terraced house with 2 flats (a 1 bed and a 2 bed) just outside of Croydon, nothing huge or out of the norm.

    Every year, we have an increasing buildings insurance bill to extortionate amounts, we have complained, paid under protest, got our 3 other quotes from independent insurance co's, requested the same from them - but they will not budge on either changing their insurers or allowing us to manage the Buildings Insurance ourselves. We are dealing with a Management Co, which is Hampton Wick Estates (Used to be Empress Management - same Co but changed the name) in SW19. The insurance company is the same one they have used for the last at least 25 years and they simply say that as they insure as a block portfolio, there is nothing they can do.

    About 10 years ago, they asked us if we wanted to purchase the freehold, we said yes, got our money together and then they refused to sell it to us - I've got a feeling that was because the properties would soon be approaching 80years lease. They refused to answer our solicitor and eventually she just gave up, eventually they said that the Freeholder has decided they didn't want to sell.

    At the time, I contacted numerous people and Leasehold Valuation etc but was completely given the run around and nobody would help unless we paid out £000's without any guarantees, unfortunately I had been unwell and unable to coninue the fight, so we have been stuck with it since. I am hoping that things have changed in that time so that we can challenge this and stop being ripped off.

    Our Ground Rent is £50 each property per year and we have just had our bill in for £726 for EACH FLAT for Buildings Insurance (not even contents too)!! If anyone could offer any help I would be extremely grateful, my 85yr old neighbour is getting SO stressed (so am I), it's just not right!
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