Contingent Building Indemnity Insurance policy, who pays for it: buyer or seller?

London_Buyer

Hi,

Does anyone know anything about contingent building indemnity insurance policies? Any info would be gladly appreciated.

My conveyancer tells me I need one because despite being share of freehold owners, my seller and the flat owner below individually insure their flats rather than share a joint policy. If the lower flat was destroyed and the owner's building insurance proved invalid, my flat would become worthless.

Furthermore, my conveyancer says the seller should pay for the policy. Whereas their solicitor argues that it's accepted practice when two flats don't share any common areas for the owners to be individually responsible for their flat insurance. Therefore if I want the policy I should pay for it.

Does anyone with experience of this situation know which solicitor is right?

missile

How strange, I have never heard of that before. Top flat is responsible for the roof?

Richard_Webster

It depends a lot on what the leases say.

If they provide that the landlord is to insure the whole building but actually you have two separate policies then a policy is required because you are not complying with the lease terms.

If the lease actually says that the separate parts should be insured separately and the respective lessees are responsible for maintenance of their part of the building then I would say that this was acceptable without a policy. Anyway as part freeholder you can reasonably ask the other flat owner to provide evidence of his insuarcne form time to time.

London_Buyer

Thanks for the info. The lease states that the building should be insured by the freeholder, it says nothing about the two flats insuring themselves. It sounds like my conveyancer is right, and I have a strong case to demand the seller provides this indemnity policy.

needelp10

Hi,

I am also looking for some help with a very similar query so I hope someone can help.

The maisonette that I am selling is leasehold and I have been asked to provide such insurance by the buyer's conveyancer.

The lease makes no reference to the landlord insuring the building, and states that it is the 'purchasers' (leaseholders) responsibility to keep the property insured.

If my buyer wants extra insurance in case my neighbours don't insure then he should pay, to my layman's view of things anyway!

Any help kindly appreciated.