Building Insurance Costs - Fair?

boxrick

I would like to know if the current share of insurance seems fair based on the fact we are connected to a commercial business and it feels like as residents we are paying a chunk of their costs, see attached picture.

For context read on...

I own a leasehold apartment in a large block of flats, half of these are owned by a company and rented out on short term basis as an 'Apart Hotel'. The other half are owned by residents, and a large area of the ground floor is used as a bar and restaurant which is joined on to the apart hotel.

My charges are currently £2500 a year in service charges, £250 in ground rent and till recently around £700 a year in builds insurance arranged by the management company. And then random one off charges for a variety of things which they decide to do and we have no say over.

We had a fire my building last year and this years renewal on building insurance was approximately £1600.

Which basically means I am paying £360 per month for what feels like not a whole lot.

As part of the insurance claim the Apart Hotel was closed for around 12 months until repairs and renovations were done to the upper apartments which will have been also claimed on insurance costs.

davidmcn

Sounds absurdly high to me - before the claim certainly, though I expect a recent significant claim, like any sort of insurance, would make premiums jump up.

eddddy

boxrick wrote: »

I would like to know if the current share of insurance seems fair based on the fact we are connected to a commercial business and it feels like as residents we are paying a chunk of their costs, see attached picture.

I can't see the image, but things to check include:

- the %age of the insurance premium your lease says you have to pay (I would expect the Apart Hotel to pay a big %age of the premium)

- the total insurance premium paid

- that your freeholder is not breaking any covenants in your lease by allowing commercial use of part of the building

boxrick

eddddy wrote: »

I can't see the image, but things to check include:

- the %age of the insurance premium your lease says you have to pay (I would expect the Apart Hotel to pay a big %age of the premium)

- the total insurance premium paid

- that your freeholder is not breaking any covenants in your lease by allowing commercial use of part of the building

Thanks for the responses, the total insurance premium is £150k ( approx ) and the amount paid per person is based on the square footage that each apartment measures, evenly split between residents and commercial.My concern is that this proportion should be considerably higher for the commercial property due to the fact their premiums will always be higher than a typical residential building, which they are currently not.

G_M

boxrick wrote: »

Thanks for the responses, the total insurance premium is £150k ( approx ) and the amount paid per person is based on the square footage that each apartment measures, evenly split between residents and commercial.My concern is that this proportion should be considerably higher for the commercial property due to the fact their premiums will always be higher than a typical residential building, which they are currently not.

It is whatever is specified in the leases.

If the leases say "the amount paid per person is based on the square footage that each apartment measures, evenly split between residents and commercial." then that is how the cost is shared out.

Whether you consider it 'fair' is of course subjective, but has no relevance in legal terms. When you bought your lease, you agreed to its terms.