Question about insurance for owner of a flat within a block.

nightmareinnorthlondon

I am asking this as a theoretical question as it might come to nothing.

Is there any kind of insurance an owner of a flat within a block of flats (1930s) can get to cover possible future problems that would require a big outlay by all flat owners (such as roof being fixed, communal boiler being fixed, drainage issues, building falling apart etc)?

This is one of the things that scares me about buying a leasehold flat is that of unforseen costs and the horror stories of owners being told to stump up tens of thousands.

Having never owned before (and still not an owner, only hope to be one in the future), I know you are required to pay ground rent, service charge which covers management of a block of flats but is insurance normally covered in this charge and if so, why would there be such large further outlay required?

Sorry if I sound like a complete novice but obviously know nothing about this and doing research before we go ahead with buying anything.

Cannot afford to buy a house so a flat is going to be our only way onto the property ladder with all the problems that come with it .

propertyman

There is no one policy.

There are some individual ones for plant eg lifts boilers entryphones which are an all inclusive contract.

The trick is that before buying

1: you ensure the whole building is inspected to identify areas which need attention now or in the foreseeable future.

2: You review the lease and accoutns to see what provision has been made for major works, and ask if any are planned.

The single biggest mistake buyer make is not understanding that and not putting money to one side believing the service charge is all they have to find.

In a house you can DIY or sit a bucket under the leaky roof, in a block that choice is not there.

sooz

As a flat owner, you will pay towards building insurance for the whole block. This covers the unforseen.

I've not heard of a policy like you are after. You are worried about maintenance costs, & that is forseen, so probably can't be insured for.

Ask if there is a sinking fund in the block. So you all pay extra towards a block savings account, in order to help you all cover the big expenses. If there isn't one, consider opening a savings account just for that yourself (although you can't hold other peoples money in there too ) atleast you will know when it is necessary, you have some money saved.

Look at https://www.lease-advice.org

Any major works in flats over £250 per unit need to be consulted. So you won't just find yourself faced with a large bill. There is a consultation process to follow, & it does take time.

nightmareinnorthlondon

sooz wrote: »

As a flat owner, you will pay towards building insurance for the whole block. This covers the unforseen.

I've not heard of a policy like you are after. You are worried about maintenance costs, & that is forseen, so probably can't be insured for.

Ask if there is a sinking fund in the block. So you all pay extra towards a block savings account, in order to help you all cover the big expenses. If there isn't one, consider opening a savings account just for that yourself (although you can't hold other peoples money in there too ) atleast you will know when it is necessary, you have some money saved.

Look at https://www.lease-advice.org

Any major works in flats over £250 per unit need to be consulted. So you won't just find yourself faced with a large bill. There is a consultation process to follow, & it does take time.

Thanks Sooz and propertyman, both of your advice has been duly noted.

I guess what I am asking is even if we pay building insurance (as part of the monthly/yearly service charge), would we be then forced to pay thousands of pounds more for certain things like roof replacement, faulty boiler (i.e. what is the extra charge bestowed on individual leaseholders for if comprehensive insurance is in place? Is this just the excess)? The reason I ask is that we have lived in 2 different rented flats where the landlord suddenly had to come up with tens of thousands of pounds to pay for a new roof for the block and in the other case a new boiler, even though both landlords were already paying towards building insurance through the service charge.