Help: Buildings insurance for 2 flat block

mba007

Hello,

I was wondering whether anyone can help me understand what kind of buildings insurance policy I need.

I've purchased a flat which includes the freehold to the building & two garages. The building itself contains two flats (it's not a converted house, but is a house-sized building with two completely separate flats). Both flats are owner-occupied.

I've phoned up one or two regular insurance companies who seem to get their pants in a twist and try to offer me two separate insurances for the two flats, which seems ridiculous.

Can I just get a regular buildings insurance policy, or does this fall into an apartment policy, a block policy, a landlord policy, or.... ?

Any guidance would be very gratefully received.

Thanks,

Martin

dogbot

Where are you? Scotland or England/Wales?

mba007

England. And to avoid confusion it's not a freehold flat :-)

dogbot

So, do you have share of freehold, split with the other flat 'owner' or do you have leasehold over the flat and freehold over the buildings in total - just you?

dogbot

Your answers to my questions above will dictate how you should go about setting up the policy and whether or not you are responsible for doing so. To be honest, differences between the potential scenarios are better answered on the property board who are very useful.

My understanding is it works like this:

There is freehold of a particular "block" or building (be that detached, semi or terraced, possibly including detached garages/outbuildings) which contains multiple dwellings (flats or as in your case maisonetts) or a combination of dwellings and seperate commercial premises (e.g. flats over a shop).

Whoever holds that freehold (the freeholder - who can be a person or another legal entitity) should organise the buildings insurance on that physical property.

To do this, if you don't have any experience, you should first, talk to your solicitor who can help advise rights and responsibilities of freehold ownership, and then talk to a good local experienced insurance broker (not a big chain like Swinton). They will sell the freeholder a block buildings policy to cover the lot.

If someone is the sole freeholder - i.e. owns the whole lot, then they would collect money for the policy as per the terms of the leasehold contracts with the leaseholders; e.g. in a block with 2 flats of roughy equal size this is usauly split equally.

If a sole freeholder also happens to be a leaseholder of one of the flats then they just need to 'pay' themselves the required proportion of the cost.

If the position is actualy that there is shared freehold accross the leaseholders of the flats, things are a bit more complicated. Essentialy I understand it is best to set up a management company to hold the whole freehold in which both leaseholders have equal or appropriately proportionate shares. They then have a leasehold agreement with that legal entitiy (i.e. essentialy with themselves but now quite). The insurance would then be arranged though the management company/legal entitiy and the cost split. It is in the interest of the parties then to ensure coverage is appropriate and adequate and their broker regularly reviews the market to get the best price.


Clearly, the leaseholders or occupants need to arrange their own contents cover. If a leaseholder does (and is allowed to under the terms of the leasehold agreement) rent the property out under a shorthold agreement, then they should get an appropriate landlords policy.