Letting a leasehold flat

BeckyJA

Hello, I am wondering if anyone can help me.

I own a leasehold flat in a converted house. I purchased it last November. There are just 2 flats, mine on the ground floor and one above. In the terms of my lease, once the current freeholder has sold the upstairs flat, the upstairs owner and I become each other's freeholders in a 'criss cross' arrangement. Until that happens, the current freeholder is responsible for insuring the entire building. My solicitor has confirmed all this. I contacted the freeholder who has confirmed they do currently have buildings insurance for the property and will send the policy schedule.

I intend to let my flat out this summer. I just called the company I have contents insurance with to change my policy to landlords insurance, and explained the above situation. They have told me that unless the current freeholder puts something in writing saying I am responsible for the buildings insurance (which I am not), I cannot take out landlords insurance.

Given that the building is insured by the current freeholder, and the tenants will presumable take out their own contents insurance, can I just leave it and cancel my own contents insurance when I move out? I don't believe landlords insurance is a legal requirement. Or is there something I do really need to do to ensure my flat is properly insured?

I appreciate any advice anyone can give. I have never let out a property before so I'm not really sure what I am doing.

ThePants999

Yes, you can just cancel your contents insurance. However, do check the terms of your lease - they often require you to notify the freeholder (and perhaps even pay them!) when you sublet.

BeckyJA

Thanks for your speedy response! My solicitor said there is nothing in my lease that states I need to inform the freeholder, so I think I'm good there.

They have told me they intend to try selling it again in December, so hopefully they are successful and I can sort my own buildings insurance with the new owner.

G_M

1) Are you leaving your contents in the flat when you let it?
* if no, why would you want/need contents insurance?
* if yes, a lot, then you either take out LL's insurance, or risk not having insurance for your contents.
* if yes, a bit, (eg white goods, carpets), then the risk is minimal

2) does the buildings insurance provided by the freeholder incude LL's insurance?

3) does your lease permit letting? and/or require freeholder consent?

See also:

* New landlords: advice, information & links

* Letting agents: how should a landlord select or sack?

ThePants999

Why would you want to sort your own buildings insurance? You don't own the building.

I'm very confused by your description of the "criss cross" arrangement. The freeholder is the person/entity who owns the land and the building, so I don't understand how two people can separately and independently be freeholders for two flats in the same building, on the same land.

BeckyJA

In response to G_M:

1) No, I'm leaving nothing, which is why I asked if I can just cancel mine and do nothing further.

2) No idea. I have not been sent the schedule as yet.

3) Solicitor said there is nothing in the lease that permits me from letting or says I need permission.

BeckyJA

ThePants999:

I'll be happy to sort it once the (future) upstairs owner and I are each other's freeholders as I will know it's all accounted for properly. It makes me anxious to rely on someone I don't know. Prior to asking for the insurance schedule today, I have never spoken to the current freeholder.

The term 'criss cross' is the language used by my solicitor and in the documentation I have received. It is exactly as you described, as far as I can understand. I think the current freeholder will cease to have any involvement in the building, and the owners of the two flats become each other's freeholders. We will then have to effectively set up our own management company and agree insurance and whatever else.

eddddy

ThePants999 wrote: »

I'm very confused by your description of the "criss cross" arrangement.

It's an arrangement known as 'Tyneside flats', or a 'crossover lease', or a 'criss-cross lease'. It's used most often in Tyneside, hence the name.

If you're interested, here's some info: http://plc.practicallaw.com/0-503-5693

@BeckyJA - so out of interest are you in Tyneside?

And back to the original question, if you have a mortgage, you will need the lender's consent to rent out the flat.

If you've only had the mortgage since November, that may be a problem for some lenders.