Buildings insurance for a flat.

oldagetraveller

Hopefully this is in the correct section!
I am the sole Executor of my late f-in-l's estate.
He owned a 2nd storey flat, one of 44, in a purpose built retirement property built in 2007. He never had buildings cover, only contents. The flat is now unfurnished and unoccupied. It's been for sale now for over a year with no sale imminent for the foreseeable future.
The solicitor appointed by f-in-l has asked about buildings insurance, how the heck do you insure a 2nd floor flat in this type of large complex with regards buildings cover? What happens if the whole place burns down, is a new flat built "in the air" just like the one insured? Does it require a specialist insurer because all the questions to apply for cover are totally irrelevant due to the situation, e.g. owned by his estate, unoccupied etc.? One of the conditions listed sometimes requires the property to be not for sale.
The whole building is maintained by a management company appointed by the developer and a six monthly fee plus ground rent is paid by his estate to them.

Werdnal

Is is leasehold? As you mention ground rent and a management company, certainly sounds like it?

If so, the buildings insurance is usually covered on a whole block policy which the leaseholders all contribute to annually. It might even be included in the ground rent payment, or invoiced separately, or within the service charge. Have you approached the MC and asked?

ankspon

As above,the buildings insurance is usually covered in monthly maintenance charges to the management company

propertyman

Relax. You are arguing yourself into a circle of speculation.:A

1; Pull out the lease and see who is responsible for insuring the building typically in a retirement block it will be the landlord or a named manager.

2: Contact whoever collects service charges for the building and review the current budget and last set of accounts for "insurance".

You have a statutory right to a summary of the policy and cover, built do note that some policies have exception is
the proprieties are empty and therefore some steps might need to be taken.

In retirement homes managers have standard polices for this.
Info here http://www.arhm.org/

propertyman

NB before others jump in, retirement properties are not like other leasehold properties and special rules apply.

They may look the same from the outside
"but one these things is not like the other"

Fire_Fox

Ask the management company what the arrangements for buildings insurance are. If the flat has been for sale for a year it's over priced and/ or badly presented unfortunately.

oldagetraveller

"If the flat has been for sale for a year it's over priced and/ or badly presented unfortunately."

No, it's pristine with new carpets and fully painted. Only five years old anyway. Both in neutral colours.
There are five other flats for sale, all the same, this one is the cheapest, in fact £20000 less than the most ambitious asking price. There has been no interest whatsoever. The potential market is limited and renting seems to be the most desirable at the moment for most people.
Thanks to all, I will check with the management company about the insurance. What could be putting buyers off is the extortionate maintenance charge. £1700/year plus £500/year ground rent which all still has to be paid in spite of the flat being unoccupied or furnished.

Fire_Fox

oldagetraveller wrote: »

"If the flat has been for sale for a year it's over priced and/ or badly presented unfortunately."

No, it's pristine with new carpets and fully painted. Only five years old anyway. Both in neutral colours.
There are five other flats for sale, all the same, this one is the cheapest, in fact £20000 less than the most ambitious asking price. There has been no interest whatsoever. The potential market is limited and renting seems to be the most desirable at the moment for most people.
Thanks to all, I will check with the management company about the insurance. What could be putting buyers off is the extortionate maintenance charge. £1700/year plus £500/year ground rent which all still has to be paid in spite of the flat being unoccupied or furnished.

Sorry but it IS overpriced for the market conditions. Fewer buyers mean cheaper selling prices. Asking prices are irrelevant as many are inflated at present, look at land registry sold prices for other retirement properties in the area in the last eighteen months. Five years ago was the peak of the market, I am not surprised you have so many sellers unable to accept they have lost tens of thousands of pounds.

Ultimately a property is worth what a buyer is willing and able to pay, you don't even have a sniff. Are you saying if you dropped the price 50% you would still have no interest or would it be snapped up?

What does the service charge cover? Have you asked for a breakdown, to see copies of all invoices and service contracts?

Richard_Webster

Builders sell these flats for silly prices to people who just want a nice new retirement flat and aren't bothered about checking the market. Round our way 25 year old retirement flats are selling for about half what builders want for new ones. Problem is that the original buyers are easily duped. Until they resist, builders will continue to get way with silly prices.

So 5 years down the track nobody wants to reduce their price because they (or their mum/dad) paid £xxx,xxx for it then so it must be worth at least as much now....

G_M

oldagetraveller wrote: »

"If the flat has been for sale for a year it's over priced and/ or badly presented unfortunately."

No, it's pristine with new carpets and fully painted. Only five years old anyway. Both in neutral colours.
There are five other flats for sale, all the same, this one is the cheapest, in fact £20000 less than the most ambitious asking price. There has been no interest whatsoever.

So it is over-priced.

As are the other flats - how long have they been on the market and have they had any interest.

Drop the price (enough) and you'll find a buyer.

propertyman

As firefox indicates the general rule is a property is worth what people will pay for it.

Distortions do occur and in this case the local market can remove any sensible purchasers, especially at a time where retirement homes are enjoying such bad press.

Moreover the buyers are most often at the top of the housing food chain and most vulnerable to the problems below them.

If FTB's can't get loans they can't buy, the next home in turn cannot trade up, and so on.

In our case with the outlaws, we simply put the upper rooms out of use, turned heating down to the minimum in those rooms and insulated the door and any filled gaps in walls etc to stop heat and dust transfer. We added a downstairs wet room and converted the dining room to a bedroom for them so they have a flat within the house and no stairs.

Even the garden has been reduced with fencing so it is manageable.

And it still a lot less than the potential loss if sold.