Managing Agent not purchasing insurance

kmmr

Hi all,

I have a leasehold flat, and am a shareholder in the company that owns the freehold. (Colloquially known as share of freehold, but I know people don't like that term!) There are 5 flats, and all are directors in the freehold.

We, as directors of the freehold, decided to retain a managing agent to look after the buildings insurance, as we are all a bit too flaky to be responsible for it, and as it is so important we left it to a company. The managing agent send us an invoice each year for insurance, which we all pay and I have an insurance document from 2011/12 detailing the insurance cover.

However, it looks like this year, the managing agent forgot to renew the insurance. They didn't forget to send the invoices (!) so we all paid in about May this year. The invoice is marked 'Insurance 21/2/2013-2014'. The invoice was only send in May, and I paid it immediately.

I now have a claim, but looks like I have no insurance. Who do you think is responsible? Is it me (the freehold company) for not checking that we have an updated insurance certificate, or the managing agent, for invoicing but not purchasing the insurance?

princeofpounds

The freehold company is responsible to you as an individual. The managing agent is probably responsible to the freehold company in turn, depending on the agreement of service you had. Given they invoiced you for insurance however I'm pretty sure they have a liability.

So legally you might need to start action against your own freehold company, then organise that freehold company to do the same against the agents. Not straightforward! At least you should be able to get the freehold company to settle with you quite quickly.

kmmr

Thanks PoP. I'll give the agent a few days to come up with a response, otherwise it does look a little complex.

I presume that I (leaseholder) can just send myself (as freeholder) a letter saying something like I am claiming against you for failure to provide insurance, and for the cost of the repair, and then I (as freeholder) can start an action with the managing agents.

3 other directors are BTL owners, so they are much less involved in the day to day operations, so there are just 2 of us who do all the main work. So hopefully we can just get the others 3 to allow the 2 owner-occupiers to act on their behalf.

It's not end of the world money, about £2-3k for repairs, but I'd rather not have to pay for it myself!

propertyman

Share of freehold simply does not exist.

if the insurance is dated 2/13 to 2 /14 and your claim is in August why do you beleive that you are not insured?

Just because they did not bill until May does not mean it was not insured. A claim for April would be out of date anyway.

Leases that allow one of billing are rare and normally insurance is part of the service charge which should be calculated and billed in the frequncy set out in the lease, not ad hoc.

princeofpounds

Share of freehold simply does not exist.

The OP did acknowledge that.

if the insurance is dated 2/13 to 2 /14 and your claim is in August why do you beleive that you are not insured?

The way I read it, the OP has found out that there was no insurance policy actually bought. It was the invoice that gave dates and charged for a policy.

kmmr

propertyman wrote: »

Share of freehold simply does not exist.

if the insurance is dated 2/13 to 2 /14 and your claim is in August why do you beleive that you are not insured?

Just because they did not bill until May does not mean it was not insured. A claim for April would be out of date anyway.

Leases that allow one of billing are rare and normally insurance is part of the service charge which should be calculated and billed in the frequncy set out in the lease, not ad hoc.

Thanks. I know SoF doesn't exist - which I carefully addressed in my OP. We operate more like an informal co-operative at the moment, and don't have regular service fees, just this one direct invoice for insurance. It may change in the future when someone sells, but for the moment it works well for us.

Anyway - looks like I was wrong. We do have insurance (yay!) it was just changed to a new company and we were not sent the new insurance details. I had called the old insurance company and was told the policy lapsed, but looks like our managing agent was doing his job and found us a better deal!

The insurance company won't be impressed. It turns out to be the same insurance company that I have had huge health bills through and a large critical illness payment this year. They should just set up a direct payment into my account.

propertyman

princeofpounds wrote: »

The OP did acknowledge that.


The way I read it, the OP has found out that there was no insurance policy actually bought. It was the invoice that gave dates and charged for a policy.

Wll no they said some people dont like the term. I said why.


Looks like I was right and there is insurance- YAY

vivatifosi

kmmr wrote: »

Thanks. I know SoF doesn't exist - which I carefully addressed in my OP. We operate more like an informal co-operative at the moment, and don't have regular service fees, just this one direct invoice for insurance. It may change in the future when someone sells, but for the moment it works well for us.

I'm a director of a resident's company too. Can I please suggest that you get a calendar and mark on it all of the key dates: insurance renewals, AGM (if you need one), annual return, company accounts filings, etc... Then put it on your electronic phones, calendars and so forth. Share it with your managing agents too. That way you'll not get anything biting you in the future.

If you don't have a reason to meet regularly it's easy to miss these things and assume that the agent will just get on with it. As most of these things run to the same period (generally annually), you only need to do it once and then set for the same date each year.

propertyman

This is what I refer to as the property diary- knowing what and when things should happen in order to keep track and plan.