building insurance help

thingonaspring

Hi there,
I am an owner occupier in a 2 bed purpose built maisonette in North London (N3). My buildings insurance is sorted out by the freeholder (an estate agent manages the freehold on behalf of a company that is also owned by the same estate agent). consequently, they just send me a letter through every june to say "you owe this much this year for your building insurance" and i pretty much comply. it was only when i had an independent estate agent round the other day for a valuation and he said that i should be paying half the amount i am - and that the quote sounded like it should be for the whole building (2 floors, I own downstairs). It's just over £500 per year (presumably per maisonette, since that is my bill, not for the whole building). I have no idea how much it should be, or indeed, how to go about checking - or complaining if it's too much!

Any suggestions gratefully received.

wessexw

If it's any help, my freeholder charges me £150 for buildings insurance on a one bed ground floor property in N22. The freeholder is the local council though so I don't know if they get special rates or anything

G_M

Do you pay any other annual charges? Management charge? Pay into a repairs contingency fund? Is the agency acting as a formal Management Company for the property and if so do they hold an annual meeting? Circulate audited accounts (which will show who the insurance company is and what the total premium is)?

Check out the leasehold advisory service.

thingonaspring

Hi again, and thanks for the replies. I actually got the letter to pay it yesterday so in front of me I have a few more details. I don't pay maintenance (they don't do any maintenance, and it's as we need it - in 3 years there hasn't been anything). 6 months ground rent = £50.
Buildings Insurance (£135,874) from June 2010 - May 2011 is £500.76.

G_M

Is that just your half share?!! It looks on the expensive side even for the whole building though I'm not familiar with london prices. You have a choice:
1) Pay it and forget. Save yourself the hastle
2) Write to the freeholder asking to see the renewal letter from the insurer - that will tell you what the full annual premium is - and also asking them to send you 2 alternative quotes. You ought in any case have the company's name and the policy number!
3) Speak to the owners upstairs and discuss approaching the freeholder together about this.
4) consider taking over the management yourselves with the upstairs flat: see the site above for details of your rights and how to do this.

Have you considered/do you know how repairs are managed? If a few roof tiles need replacing does it fall to the upstairs flat, or do you share cost 50/50? Check your lease!

More importantly, what if major work is needed (ie a complete new roof, external painting, new windows)? A self-managed Management Company would allow you to pay in a small amount each year and build up a fund. No nasty shock in the future!

Fire_Fox

Sorry to disagree with GM, but it is a slow process to self management and there will be a surprising amount of work involved once you achieve it. I feel this is taking a sledgehammer to crack a nut! It would be more sensible to look into buying the freehold, doesn't sound like it is lucrative for the current freeholder so they may be glad to get shot of it. This will free you from ground rent, put you in charge of all repairs and free you from the costs of extending your lease at 80 years or below so could easily pay for itself.

Do you have a copy of the insurance certificate? Do you receive a copy of the accounts? Our buildings insurance is £85 per year for each of 15 flats in Yorkshire and we are completely ripped off on everything else. I would write to the estate agent and ask them to get alternative quotes for the buildings insurance, ask your neighbour to do the same. I would note that freeholders do NOT have a legal responsibility to minimise costs, but they do have to ensure any charges are "reasonable" (see LEASE website).

thingonaspring

I think if we were to stay a bit longer where we are, we would consider looking into buying the freehold, but because it's not really big enough for us we will be looking to move on within about 6 months or so. However, that's why I was looking to see if I can minimise costs, and it was actually another estate agent who asked about how much we were paying. As soon as we told him, he said it was because the freeholder was a company owned by the estate agent, and that we're paying about the amount for the full building, not just for our share. thank you for your help though, i will certainly be asking them to obtain some further quotes. even for london, a couple of people have commented it was a bit high.

dacouch

Is the roof flat by any chance

thingonaspring

There is a flat roof at the back actually - does that have a large bearing on building insurance overall?

dacouch

thingonaspring wrote: »

There is a flat roof at the back actually - does that have a large bearing on building insurance overall?

A flat roof can double the premium you pay as it carries a much higher risk of claim.

Typically Insurers tend to not apply a load if the flat roof represents under 20% (Some Insurers use 25%) of the total roof area. If the flat roof represents a higher proportion of the roof area Insurers either decline to offer cover or apply a load which often doubles the premium.

thingonaspring

Hi There, Long time since this post, but a bit of an update... they sent me an invoice for the people who own upstairs by mistake, and they have a lesser amount to pay (£395, but it's against an insurance value of £107,000), and only £25 ground rent. Is that normal because theirs is the upstairs flat? If I get it revalued for insurance, am I likely to be paying less, or is it likely the people upstairs will just have to pay more to cover a higher insurance price...?