Leaseholder problem - Any insurance experts here?

arteta1878

Hi,

I am a leaseholder in a development of apartments that is managed by a company called Trinity Estates.

We have had nothing but problems with this company since they were appointed by the developer Persimmon Homes, and after doing a bit of research and looking into their service, it appears that their reputation across the country is appalling with many development under their management in complete disarray.

However, one alarming financial matter has recently raised it's head and is as follows!

Under the terms of the lease, it is their duty to obtain a buildings inusrance policy for the apartment block which is then charged out to all leaseholders and added to the general running of the block in their annual service charge.

After investigation and much badgering, we have found out that they are unashamedly adding up to 40% (sometimes over) on the top of the cost of the premium, and then passing this cost onto leaseholders by putting it through another company owned by themselves and claiming it is an admin fee for insurance advice and expertise!

The company are called PKN Ltd and are based in the Isle Of Man. They add absolutely no value at all to the policy whatsoever, and are not regulated to mediate insurance in the UK and are just adding an additional fee for their own benefit at the cost of the leaseholders it appears!

When taking over a development, Trinity Estates tell you that insurance is dealt with by a registered FSA member called OAMPS Special Risks, who actually issue the policy and take a fee from the underwriter Axa for doing so, this all checks out fine.

What they fail to tell you is that at that point, OAMPS route the policy to another company as requested by Trinity Estates called PKN Ltd, who then add a fee which is charged to leaseholders and added to the annual service charge budget by Trinity Estates.

PKN has exactly the same directors as Trinity Estates, it is a clear and blatant conflict of interests as far as we can see! Also, why divert the policy through the Isle Of Man?

As a leaseholder, it appears to me that PKN have been set up to do nothing but make an extra and unnecessary cost to the leaseholders on their developments, of which they boast to manage over 600!

Their paperwork is also misleading, and it is made to look as though PKN are licensed by the FSA to offer insurance.

We think that this must be either a complete conflict of interests, and / or bordering on illegal????

Any thoughts would be appreciated.

Richard_Webster

Can't comment on whether or what you say is true, but if it is, it may be worth asking Persimmon why they deal with these people.

If a builder has a good reputation then a buyer might happily assume that the builder will continue to own the freehold. they need to understand that this will rarely be the case.

fairground

Arteta, have you checked out blagger.com dozens of people have been checking out PKN Ltd. and their connection to Trinity Estates, every one of those on that blog have commented about the sudden increase in insurance, cannot be a co-incidence.

Fire_Fox

You need to read your long lease to see what administration charges are allowable. Secondly you should read the website linked to below which gives you a feel for what your rights and responsibilities are, and what those of the freeholder/ management company are. By law all charges must be "reasonable", however they do NOT have to be minimised. I believe you can apply to an LVT not to use the specific insurer that your freeholder insists on, but I don't know the criteria (again will be in the link below). Do you have a written explanation for the insurance being diverted through an additional tier of management with a 40% premium? If not write and request this.
http://www.lease-advice.org/publications/

fairground

I have just been informed that the tenants association of my block have insisted Trinity use a different insurance broker and the quote came back £26000 less by not using Andrew Stewart and PKN Ltd. both companies have the same directors/associates as Trinity Estates. Make sure you contact your residents/tenants/leaseholders association if you have one to urge them to do the same. If you don't have one, make sure you set one up, it's amazing what they can do. Wish we had one in previous years.

nix1911

We are also an estate managed by Trinity and queried with them why our buildings insurance had increased so much. We were told that our block was timber-framed and posed more of a risk (something about new legislation). We are definitely not timber framed, so I got a copy of the insurance certificate off the website and could understand why the certificate was issued to PKN limited, from a broker called OAMPS with insurance by AXA – too many companies involved at our expense! I performed a company search for PKN...nothing in the UK, then found out they were an IOM company and were a sister company of Trinity! IOM companies who are in the insurance business have to be licensed to do so. I did a search with the IOM IPA and nothing came up so I emailed them and received confirmation that PKN LIMITED are NOT licensed to act as an insurance intermidiary. The matter is currently being investigated by the IPA and hopefully I will hear back soon.