Sale fallen through due to freeholder not supplying buildings insurance

xylophone

You have a lease from the freeholder.

It would appear that the freeholder has the legal responsibility to insure your garage and the right to demand your share of the premium he has to pay?

Whether or not he chooses to demand that share is immaterial to your right (via the lease) to require him to take out the insurance and (it seems to me) to prove to your satisfaction that he has done so?

moneyistooshorttomention

WGHB77 wrote: »

The lease states that I am to pay on demand 16.66% of the freeholders insurance premium. After speaking with the freeholder, he decides not to demand this payment (not worried about demanding a small amount).


When I purchased the property, my solicitor did not even make me aware of this, hence why I didn't understand when all this came up.

Looks like that's where you are coming a cropper at getting this info. out of him. I would have been suspicious at the outset as to why he didn't want my part of the insurance money. It does look like he is taking the view "I pay it all - so I see it all and no-one else gets to see it".

Now thinking the way to proceed with future sales of your property might be to say "The rules/law/etc are that I pay that 16% or so and I AM going to pay it - whether you like it or no mate" phrased rather better than that - but that would be the drift of it.

As part-payer you would then have the legal right to see the details of what you are paying towards.

WGHB77

HappyMJ wrote: »

I would just say the garage is not insured and see what the buyer's solicitor says about that.

It's not legally compulsory to purchase buildings insurance on a property. You should do it and a mortgage may require you to have a policy in place but it's not legally required.

I don't have it on my property so any request from my neighbours would be answered "there is no buildings insurance". What can they then do? Nothing. Does that mean they could never sell the property?

Judging by what I am going through, I would say the answer is that they couldn't sell their property if a mortgage is involved? The freeholder has supplied a signed letter confirming that he insures the block as per the lease and included his policy number and this was not acceptable. I don't know if a different buyer and solicitor would have taken a different view?

Arthritic_Toe

One 'left-field' option you could consider would be to sell your garage to the freeholder for a small amount. You could then just rent it back for a nominal fee. This removes the problem all together from the house sale.

Freecall

Arthritic_Toe wrote: »

One 'left-field' option you could consider would be to sell your garage to the freeholder for a small amount. You could then just rent it back for a nominal fee.

Is that not what leasehold means?

Arthritic_Toe wrote: »

This removes the problem all together from the house sale.

Except that presumably the lease has a value so all you will achieve is a reduction in the overall value of the property.

Arthritic_Toe

Freecall wrote: »

Is that not what leasehold means?

Except that presumably the lease has a value so all you will achieve is a reduction in the overall value of the property.

Having a 'complicated' title is a major pain these days. Mortgage and insurance companies don't like them. A complicated title reduces the value. Just suggesting one option to simplify it.

xylophone

Is there any reason why the flat and each garage should not have its own freehold like terraced houses?

Would it be possible for the garage lessees to buy their freehold?

DandelionPatrol

xylophone wrote: »

Is there any reason why the flat and each garage should not have its own freehold like terraced houses?

Would it be possible for the garage lessees to buy their freehold?

The convention with a freehold is that it starts from a patch of land and goes vertically up. You can have freeholds which extend out at a higher level over another patch of land - called a flying freehold, but essentially they cause more problems which leasehold is supposed to resolve.

Generally, leasehold is necessary because some modern building styles eg coach houses, don't comply with the pattern of a plot of land and everything contained within the vertical envelope