Freeholder - buildings insurance

rustie

Hi there - we own a leasehold flat in a converted house where the freeholder has the downstairs flat.
For the past 10 years we've had the same freeholder - he recently sold the flat + freehold - we heard absolutely nothing about either the sale nor the new owner - we only found out as someone we knew saw the For Sale sign...

I made contact with the new owner via a For Rent sign on his flat - he lives in Hong Kong - contacted the agent who passed my details onto the new owner as I wanted to know what he was doing about buildings insurance - previously, we had paid half of the buildings insurance every year. Turns out the new owner has no insurance - he quickly rectified this and sent us the info - and here is the problem...his new policy covers him for Public Liability, Buildings AND contents insurance - I pointed out that his Public Liability and Contents is not relevant to us - and have since had a very long, drawn out email exchange where he is demanding half of the whole policy premium...

I've spoken to his insurance - Aviva - who couldn't care less but did advise I could be 'named on his policy' and therefore it would also be beneficial to me...???!

Anyone had this problem - all I want to do is pay my half of the buildings insurance and get on with things! It doesn't help that the owner is in Hong Kong with limited English...

Our lease clearly states we are liable for 'buildings insurance - paid yearly' and that's what we've been doing for the past 10 years!
Argh!
Thanks for any advice

marksoton

rustie wrote: »

we heard absolutely nothing about either the sale nor the new owner - we only found out as someone we knew saw the For Sale sign...

You didn't notice a for sale sign on your own building?

rustie

marksoton wrote: »

You didn't notice a for sale sign on your own building?

um - nope - the flat is rented out and we live 3 hours away...

eddddy

Check whether you qualify for the "Right of First Refusal" for the buying the freehold. See: http://www.lease-advice.org/advice-guide/right-of-first-refusal/

If you do qualify, and the freehold has been sold without your knowledge, the former freeholder may be guilty of a criminal offence.

Regarding insurance...

It's reasonable, and probably sensible, for a freeholder to have public liability insurance. e.g. for if a tile falls off the roof and injures somebody. And you would be liable to pay your share.

Is the 'contents' part just mean contents in the communal areas etc? (it may just me a standard part of the policy, rather than something the freeholder set up specially - meaning, if there is any contents in the communal area, they would be covered.) And again, you would be liable to pay your share.

Have you read the policy?

rustie

Oh that is very interesting! We weren't contacted at all before the sale - we are the only lessee as there are only 2 flats - the one downstairs is currently being advertised for rent - which is how I tracked down the current owner...
Thank you for this - I shall have a good read...
As for the policy - I have seen the documents - the liability bit does indeed cover such events as tiles falling off the roof, but surely the freeholder should be responsible for this? and that part of his insurance would therefore cover such eventualities? How would we be liable in this scenario?
Contents - again, we rent out our flat unfurnished - the 2 flats have separate front doors and there are no communal areas - so, again, I fail to see how contents insurance would benefit us?
Thank you again..

Arthritic_Toe

The contents and (I think) public liability insurance is very cheap compared to buildngs insurance, so it will only be a very small part of it. Has it gone up significantly since the change?

rustie

Just received a message from the owners Insurance broker - advising us to have the policy in joint names...??? And to do this, they obviously want all our personal details - bankruptcy etc and all the usual questions that go with taking out an insurance policy!
And yes, the cost has gone up by nearly £100 ...

G_M

I'd have though every policy would include public liability. Have you checked your previous policy for comparison? It's pretty standard as it forms an important part of buildings cover.

Removal of it from the policy (even if possible) would have a negligible effect on the premium. How does the premium compare with the previous policy?

If the contents is for a large amount ie to cover a fully furnished flat, this would add to the premium. If it is for a small amount (ie to cover communal areas and perhaps his unfurnished flat, the additional premium would be negligible.

For example, some landlord buildings policies automatically include £3 or £5K of contents cover just to cover kitchen white goods.

The simplest solution might just be to get your name added to the policy. That way your own white goods, carpts etc will be covered, plus you will gain some control over making claims as a policy-holder.

But if the overall primium is hugely up on last year you may wish to continue to fight this.......

eddddy

rustie wrote: »

As for the policy - I have seen the documents - the liability bit does indeed cover such events as tiles falling off the roof, but surely the freeholder should be responsible for this? and that part of his insurance would therefore cover such eventualities? How would we be liable in this scenario?
Contents - again, we rent out our flat unfurnished - the 2 flats have separate front doors and there are no communal areas - so, again, I fail to see how contents insurance would benefit us?
Thank you again..

You're coming at this from slightly the wrong angle.

Assuming you have a 'typical' lease...

- your Freeholder is required to do the duties described in your lease (presumably this includes arranging buildings insurance).

- you are required to pay proportion of your freeholder's reasonable costs, in carrying out those duties. (Presumably, your lease says your proportion is 50%)


So you would need to show that the insurance policy chosen by your freeholder is not reasonable. (It depends on the precise wording of the lease, but I think a court would consider public liability cover to be a 'reasonable' part of buildings insurance.))