Mandatory Buildings Insurance for Leasehold Property

AndyOdish

Hi All,

I thought I'd ask you all as the experts as the other half's answer didn't sound right to me!

The OH has a mortgage on a 2 bedroom maisonette, she doesn't own the leasehold and pays an annual service charge alongside ground rent.

She has received an invoice for £262.60 for the annual buildings insurance from Pier Management which she has always paid.

She states that the leasehold states that the insurance is mandatory and can only be taken through their nominated provider - ie she can't go anywhere else.

£262 is a lot, first quote with Directline was for £120.
While I understand having Insurance is mandatory surely they can't dictate who we take insurance with?

Any advice is always greatly appreciated!

Thanks

Andy

Dangermac

AndyOdish wrote: »

Hi All,

I thought I'd ask you all as the experts as the other half's answer didn't sound right to me!

The OH has a mortgage on a 2 bedroom maisonette, she doesn't own the leasehold and pays an annual service charge alongside ground rent.

She has received an invoice for £262.60 for the annual buildings insurance from Pier Management which she has always paid.

She states that the leasehold states that the insurance is mandatory and can only be taken through their nominated provider - ie she can't go anywhere else.

£262 is a lot, first quote with Directline was for £120.
While I understand having Insurance is mandatory surely they can't dictate who we take insurance with?

Any advice is always greatly appreciated!

Thanks

Andy

Hi Andy

£262 does seem expensive, but it depends on the policyholder's details (including claims experience - not just necessarily on your property - they may own other properties that form part of the same policy).

It is also likely that the freeholder is making a decent profit on the insurance premium.

With regards to the alternative quote that you have received from Direct Line, can you confirm which bits of the building they have quoted to insure. It is not normal in England/Wales to seperately insure individual units within a freehold building.

I would request that the Freeholder provide your OH with a copy of the schedule. That way, you can see if there is any obvious reason why the premium is expensive.

DM

RGB_2

Furthermore I would inspect the policy for additional extras the freeholder will be benefiting from. There is likely to be loss of rent covers, additional protections etc.

If you're not benefitting from them why should you pay?

AndyOdish

Thanks RGB and Dangermac for the advice.

Frustratingly looking further into and talking to other tenants I have no choice. There are a number of other houses that are combined with the building. The street as such as treated as a block of flats so unless I get the freehold I'm stuck with them.

Thanks again

Andy