Shared house insurance issue

papermate

Hi I'm new to the forum and was wondering if someone might be able to comment on an issue. We are four directors of a management company for a Shared Freehold (four flats, each is a flat owner). One of us is selling their flat six months into the period of current annual house insurance. The director selling, is asking for a refund of half of their share of the annual premium - £180 already paid, which is effectively £90. None of us have discussed or made an agreement that this arrangement should be in place if one of us sells our flat. Might anyone have come across this before or know what is normally done in this situation. Many thanks,
papermate : - )

Fire_Fox

Welcome! Presumably you don't have a float in your bank account and won't be getting a refund from the insurance company? Suggest they get the money from the new leaseholder. The money has been paid by them with their leaseholder hat on and the new leaseholder will inherit all the rights and responsibilities, insurance service charges and ground rent are not paid by an individual IYSWIM. The property must be insured continuously, the lender and/ or solicitor will want to see proof of this.

V_Chic_Chick

Have they actually completed the sale, or is it just on the Market? If it's the latter, it may very well become a moot point when it takes a while to sell.

Otherwise, I'd suggest giving it back to them when the new owners pay up.

papermate

Thanks Fire Fox. No, the insurance company have been paid one lump sum and it's sorted. Letting them discuss with new leaseholder sounds good, thanks thank for your thoughts.
V Chic Chick, yes the sale has been completed, but that is a point. I don't see why they think it's our job to sort it out. What's worse is that we got to like these people and don't want to come off as being gits. However.....
I do wonder how it's stated in standard lease agreements with regard to this aspect?
P.

Fire_Fox

papermate wrote: »

Thanks Fire Fox. No, the insurance company have been paid one lump sum and it's sorted. Letting them discuss with new leaseholder sounds good, thanks thank for your thoughts.
V Chic Chick, yes the sale has been completed, but that is a point. I don't see why they think it's our job to sort it out. What's worse is that we got to like these people and don't want to come off as being gits. However.....
I do wonder how it's stated in standard lease agreements with regard to this aspect?
P.

No such thing as a standard long lease, what is in yours is the relevant issue. In general freeholders are covenanted to keep the place insured at all times and leaseholders are covenanted to reimburse the freeholder. If you are cancelling policies, refunding and invoicing I don't see how you can keep the place insured at all times plus there would be admin costs. It's perfectly straightforward for the outgoing leaseholder's solicitor to ask the incoming leaseholder's solicitor for £90, I don't see what you have to feel guilty about.

Richard_Webster

If the freeholders are insuring the property then the normal thing would be for the person selling to collect that proportion from his buyer on completion.

Fire_Fox

papermate wrote: »

Thanks Fire Fox. No, the insurance company have been paid one lump sum and it's sorted. Letting them discuss with new leaseholder sounds good, thanks thank for your thoughts.
V Chic Chick, yes the sale has been completed, but that is a point. I don't see why they think it's our job to sort it out. What's worse is that we got to like these people and don't want to come off as being gits. However.....
I do wonder how it's stated in standard lease agreements with regard to this aspect?
P.

No such thing as a standard long lease, what is in yours is the relevant issue. In general freeholders are covenanted to keep the place insured at all times and leaseholders are covenanted to reimburse the freeholder. If you are refunding and invoicing I don't see how you can keep the place insured at all times. It's perfectly straightforward for the outgoing leaseholder's solicitor to ask the incoming leaseholder's solicitor for £90.

papermate

Thanks everyone for their input, it puts things in perspective for me. These comments are really helpful.
P.:)