Buildings insurance for ex local authority flat

callum323

Received our mortgage offer last Thursday from Natwest! Has been a bumpy ride including a job change less than a month after initial application but Natwest are still happy to lend despite still being in probation period. :beer:
The flat that we are buying is an ELA in London and half of the block are still occupied by council tenants. I have heard that on exchange I must have buildings insurance in place. My question is, since the block is owned by the council, will we still need to buy buildings insurance or is that already covered by the council?

Willing to do anything now just to make sure everything goes smoothly! Hopefully the solicitors on both side can get onto it ASAP aiming for completion before July (over optimism?).:A

Thank you very much and all the best to those out there waiting for their mortgage offers!

agarnett

Simply put yes, the block insurance will be arranged as a whole by the council's insurance department.

That's the way pretty much all blocks of flats are insured unless there is some bolted on annex that your flat happens to form on its own which has a history .being insured as a separate building alongside the main building (hardly likely - just my imagination running riot!)

Your conveyancy solicitor will need to be in contact with the council who will upon completion be billing you either directly or via their agent a regular annual service charge for maintenance and repairs (and insurance) for the whole building.

Are you ready for that? Do you know how that works and what to expect? Have previous year's service charge accounts been made available to you? Is the service charge budgeting and standard of maintenance of the whole building good? Leasehold is a pain in the neck for millions of unsuspecting leaseholders whether they bought ex LA or not. Ex LA have had some of the nastier surprises.
How many years left on the lease. Less than 80 is a potential resale problem. Low 80s and you may need to shell out for a lease extension soon.

Hopefully no nasty surprises e.g. rumours that the external cladding of the whole building needs replacing or the roof or the lifts and electrical installation and plumbing, especially if they intend levying a one off heavy service charge shortly to pay for it? Or even worse, no rumours that the council plans to knock the whole thing down and redevelop? That sort of thing has blighted the lives of some unsuspecting leaseholders for years.

I think you need to be extremely careful buying an ex LA flat where there are still council tenants renting. Yes you get a lot of space for your intial outlay, but then what?

You may need to do a lot of homework to get as up to speed with likely service charges and problems as longer term residents. Estate agents selling flats are notoriously blase about service charge trends and when the next major works are planned, and whether there are sufficient reserves already collected from service charge to pay for the next major works.

You will already realise that by buying such a property you are restricting your ability to resell. You must be sure you know what you are getting into, and your question indicates you may be a little inexperienced.

Take care, and remember that if you haven't exchanged, you are not committed to buy.

Oh, and your conveyancy solicitor probably isn't an expert in ex LA flat purchases, nor indeed an expert in anything. Don't rush it. Get the info you need before committing. How long was it on the market before you made an offer? They tend not to sell easily unless they are in the very best locations AND obviously well managed.

callum323

agarnett wrote: »

Simply put yes, the block insurance will be arranged as a whole by the council's insurance department.

That's the way pretty much all blocks of flats are insured unless there is some bolted on annex that your flat happens to form on its own which has a history .being insured as a separate building alongside the main building (hardly likely - just my imagination running riot!)

Your conveyancy solicitor will need to be in contact with the council who will upon completion be billing you either directly or via their agent a regular annual service charge for maintenance and repairs (and insurance) for the whole building.

Are you ready for that? Do you know how that works and what to expect? Have previous year's service charge accounts been made available to you? Is the service charge budgeting and standard of maintenance of the whole building good? Leasehold is a pain in the neck for millions of unsuspecting leaseholders whether they bought ex LA or not. Ex LA have had some of the nastier surprises.
How many years left on the lease. Less than 80 is a potential resale problem. Low 80s and you may need to shell out for a lease extension soon.

Hopefully no nasty surprises e.g. rumours that the external cladding of the whole building needs replacing or the roof or the lifts and electrical installation and plumbing, especially if they intend levying a one off heavy service charge shortly to pay for it? Or even worse, no rumours that the council plans to knock the whole thing down and redevelop? That sort of thing has blighted the lives of some unsuspecting leaseholders for years.

I think you need to be extremely careful buying an ex LA flat where there are still council tenants renting. Yes you get a lot of space for your intial outlay, but then what?

You may need to do a lot of homework to get as up to speed with likely service charges and problems as longer term residents. Estate agents selling flats are notoriously blase about service charge trends and when the next major works are planned, and whether there are sufficient reserves already collected from service charge to pay for the next major works.

You will already realise that by buying such a property you are restricting your ability to resell. You must be sure you know what you are getting into, and your question indicates you may be a little inexperienced.

Take care, and remember that if you haven't exchanged, you are not committed to buy.

Oh, and your conveyancy solicitor probably isn't an expert in ex LA flat purchases, nor indeed an expert in anything. Don't rush it. Get the info you need before committing. How long was it on the market before you made an offer? They tend not to sell easily unless they are in the very best locations AND obviously well managed.

Thank you very much agarnett for your detailed and informative reply! You have raised some fantastic points there. Despite of course knowing the most recent service charge amount, the history of service charge is definitely something that we had overlooked. I shall be asking the vendor for it just to have a decent idea. The lease is looking okay but not amazing at just below 100 years. We will be looking into extending it hopefully 10 years down the line before it becomes too expensive to do so.

Again, thank you very much agarnett! MSE needs more knowleadgeable and helpful people like you!:T