Buildings Insurance on Coach House

bks69852009

Me and my partner have just moved into a two bedroom coachouse which is built over 4 garages (one of which we occupy). The other 3 garages are effectively owned by us but leased out to other people on a 999 year lease. We have been told we can charge the other garage users a reasonable percentage of our buildings insurance premium for the use of the garages. Does anyone have any experience in doing this? What would be considered to be a "reasonable" percentage? Who deals with the payment would it be done through our solicitor?

Any advise much appreciated!
Thanks

theartfullodger

In your shoes I'd go talk to a couple of insurance brokers and see what they advise...

- You'd be running a business renting out the garages... (and would need to tell HMRC about the income .... before someone else did...)
- So I'd say you need Landlord insurance or commercial policy on the garages at the very least (I suspect "normal" buildings/contents insurance wouldn't cover such a business arrangement...)
- I'd be concerned over living over petrol which can burn with other people having access if I didn't have decent insurance cover...


What, decided not to bother & just stick with residential buildings insurance as it is cheaper & easier?? Consider... a rented-out-garage car catches fire: Your visiting small-children relatives sleeping upstairs are damaged/die. There is an inquest. Court examines buildings insurance. Lotsa coverage in local press. Insurance company declines to pay out at all (for kids or buildings re-instatement) as you broke their conditions... You are now bankrupt & a pariah...

cheers!

Lodger

Richard_Webster

If OP is the freeholder in respect of the three leasehold garages then he should have copies of the the three leases which will say what should happen about insurance. From what OP has said I assume that the freeholder is required in insure the garages and can collect a proportion of the insurance premium from the garage lessees. This may not be the case - the leases may place the insurance obligation on the lessees - so it is important to see exactly what the leases say.

bks69852009

Hi Richard, Thanks for your reponse. Yes, we are the freeholder of the whole building including all the garages. I believe we have a copy of the lease which has also been passed to the occupants of the other garages and this does state that we are able to charge a reasonable propertion of the insurance premium to them. Would this all operate through our solicitor? Thanks again

zappahey

We had a similar situation in our Persimmon house in Wiltshire but we were one of the garage occupiers rather than the coach house.

The difficulty is likely to be reaching an agreement on what is reasonable and how you work out the division. Is it going to be on floor space, volume, or something else entirely?

Luckily our garage owner didn't actually ask for a contribution so the difficulty didn't actually arise.

BTW, if it's a Persimmon house, you might want to get the lease checked as ours was flawed and almost derailed our house sale.

bks69852009

Hi Zappahey, thanks for reponse. Yes I'm afraid it is a Persimmon home and coincidently in Wiltshire so I will def check the lease, is it best to pass this to a solicitor to check for peace of mind? My legal knowledge is very limited!!! Thanks

zappahey

It's probably less of an issue for you as you are the garage owner but the issue was that the lease is written in such a way that it cannot be transferred if someone wants to sell their house, so the occupiers of the garages might have problems. IIRC it was meant to say that the lease could only be transferred as part of a package with the house but it effectively said that it couldn't be transferred at all.

Unfortunately, our buyers' solicitor picked up on it but ours hadn't when we bought it.

Ours was in Calne, if that makes things any clearer.

Richard_Webster

Whilst there is a lot of logic in having the whole building covered by one insurance whoever drew up the leases didn't really think through the practicalities of the average coach-house owner having to organise the insurance and possibly get a special kind of policy for it.

I suppose you could get a surveyor to give you estimated rebuild costs for each separate unit, and then charge the lessees using those proportions.

coupleuk

Hi

We are in the same situation as the OP - a coach-house above 4 garages with leases etc.

Our lease states each garage lessee must "contribute and pay 1/9th of the cost incurred by the lessor is maintaining insurance on the property".

That isnt 1/9th of the insurance premium but 1/9th of the (reasonable) cost INCURRED by the lessor.

Getting a policy for these things is a nightmare, believe me.

You cannot just get a std policy as you must state the full situation. Most insurers arent interested and the others will come back to you with higher quotes.

As such, we charge each lessee £5 to cover the extra work involved on top of that 1/9th share. Obviously, if they have 2 garages they pay 2/9ths etc.

We've not had any issues with this.

Sadly, if this isnt in your Lease (look in the fourth schedule) then you can only try and negotiate with each lessee but you then have to get it written up by a solicitor which will cost.

I would go back to Persimmon and try to insist they sort it for you.

Good Luck.