CRL/Alpha insurance for flats

cheap-information

I like many others have been affected by the bankruptcy of Alpha Insurance who were used by CRL for the warranties of new builds.


Due to the FSCS being unable to find alternative cover to homeowners, we have been advised that we will be required to find this ourselves.



Our flat which has another 6 years of this warranty left, is in a block of 24 flats. Due to this, we have a few queries:


1) Buying insurance for a house would be a relatively simple process as I could go out and search for it. However, in this case, we are one of 24 flats and would have thought that the insurance needs to be purchased on behalf of the building instead of the flat. Does this mean that the freeholder/management company need to arrange this? If this is true, trying to get all the leaseholders in agreement would be quite difficult.


2) I currently have another 2 years of my 5 year fixed mortage. I know that when getting the property, the purchase was a new build so the warranty needed to be shown. If I was to re-mortgage, do you think that a new mortgage company would require the certificate even though it is no longer a new build?
If this is the case, if I remortgaged with the same provider, I guess I could avoid having to show that the warranty is with CRL?




If anyone is in a similar situation, please let me know. I have seen a variety of people who have houses in this unfortunate position but no one discussing about flats.


Any advice would be much appreciated!

G_M

cheap-information wrote: »

I like many others have been affected by the bankruptcy of Alpha Insurance who were used by CRL for the warranties of new builds.

Our flat which has another 6 years of this warranty left, is in a block of 24 flats. Due to this, we have a few queries:

1) Buying insurance for a house would be a relatively simple process as I could go out and search for it. However, in this case, we are one of 24 flats and would have thought that the insurance needs to be purchased on behalf of the building instead of the flat. Does this mean that the freeholder/management company need to arrange this? If this is true, trying to get all the leaseholders in agreement would be quite difficult.
Do not confuse buildings insurance (which would be a relatively simple process as I could go out and search for it.") with a new building warranty.

Yes, buildings insurance is usually arranged by the freeholder, or management company on the freeholder's behalf. Lease holder consent is not needed (though they are usually billed for it) in that it is normally explicitly given via the lease.

2) I currently have another 2 years of my 5 year fixed mortage. I know that when getting the property, the purchase was a new build so the warranty needed to be shown. If I was to re-mortgage, do you think that a new mortgage company would require the certificate even though it is no longer a new build?
If this is the case, if I remortgaged with the same provider, I guess I could avoid having to show that the warranty is with CRL?
If selling a flat under 10 years old, the buyer is likely to ask for a warranty to be yransfered into their name. If there is no valid warranty, they are likely to be put off....

Whether a lender would take the same view will depend on the lender.

If you can find an insurer who will offer a warranty, do so, but I suspect few will be interestd in a 4 year old building.

edit: a quick duckduckgo search (OK - use google if you must) turned up

https://www.labcwarranty.co.uk/builders-developers/completed/

They warrant completed new homes. so worth investigating.

Jjaz

I have the same situation with my flat. Also made worse by the fact that there are 9 flats in my block of varying sizes and the owners of the small flats want the premiums for the replacement cover to be apportioned to flat size, ie smaller flat owners pay less. This is despite all flatowners receiving the same compensation sum from the fsca... circa £239. I an resisting paying premium based on flat size as it is my view the replacement cover should be split equally between flats as concerns the structure of the entire building and any latent defects in that structure. Any advice would be most welcome. Lots of information about houses but struggling to understand the landscape as far as flats are concerned.

eddddy

Jjaz wrote: »

I have the same situation with my flat. Also made worse by the fact that there are 9 flats in my block of varying sizes and the owners of the small flats want the premiums for the replacement cover to be apportioned to flat size, ie smaller flat owners pay less. This is despite all flatowners receiving the same compensation sum from the fsca... circa £239. I an resisting paying premium based on flat size as it is my view the replacement cover should be split equally between flats as concerns the structure of the entire building and any latent defects in that structure. Any advice would be most welcome. Lots of information about houses but struggling to understand the landscape as far as flats are concerned.

Presumably, different size flats each pay a different percentage of the service charge (including the buildings insurance premium etc).

TBH, I'd say the logical thing to do is to use those percentages to split the cost of the warranty.

I guess that the illogical aspect is that the FSCS refunded everyone the same amount.


Perhaps an even fairer thing to do is for everyone to put their £239 in the pot towards the premium, then the rest of the premium is split according the the service charge percentages.

How much is the premium likely to be, do you know yet?

Jjaz

Largest flat £2,000.. smallest flat £800.

To me it is concerned with the structure and yes we already pay building insurance (apportioned to size of flat) as part of service charge.

I have suggested redistributing the refunded premium but this has been ignored... unfortunately it seems everyone is attempting to limit their loss.

I do not intent to agree to the premium unless there is an equal split

Jjaz

Sorry just to clarify it doesnt make sense to me when the latent defects insurance concerns the entire structure of the building not just one flat

eddddy

Jjaz wrote: »

Sorry just to clarify it doesnt make sense to me when the latent defects insurance concerns the entire structure of the building not just one flat

So that's exactly how buildings insurance works as well.

The buildings insurance policy covers the entire structure of the building against fire, explosion, flood, escape of water, impact, subsidence etc.

So if a wall of the building cracks due to subsidence (or maybe because of a gas explosion), it should be covered by the buildings insurance policy.

Or if that same wall cracks in a similar way due to a structural defect, it should be covered by the structural defects policy.


Which is why it seems to make sense to apportion cost for the defects insurance in the same way as the buildings insurance.

Jjaz

Do you know if the freeholder should also contribute? Each flatowner has a long leasehold of 125 years

eddddy

Jjaz wrote: »

Do you know if the freeholder should also contribute? Each flatowner has a long leasehold of 125 years

There aren't really any 'rules' to say who should or shouldn't contribute - and how much.

(The lease normally contains all the 'rules', but when the lease was written, I doubt anyone foresaw the possibility of the defect insurer going bust.)

But a freeholder doesn't generally contribute to buildings insurance, and this is 'kind of' similar.


And if you don't get defect insurance, and a defect results in damage, it will be the leaseholders who have to pay for the repairs (not the freeholder).

So the freeholder has no reason to get defect insurance. The defect insurance is a benefit the leaseholders, not to the freeholder.

maxineL

I have just started looking into this insurance issue and its causing me a world of stress. I live in a block of 12 flats and this same things has affected me. I can't seem to find anyone to answer my questions. I have just remortgaged my property and the company didn't even mention the insurance issue. However I am keen to have insurance sorted asap as i will want to sell within 10 years.
I have been quoted £200 to replace the premium which i simply don't have. I have tried calling the company to discuss my q's but I'm not having much luck. Would the £2000 be for JUST my flat or for the whole block? How can it possibly be that much??? The compensation I received is £145 so there is a slight discrepancy to say the least!
Any advice someone can offer me would be great. Thank you.

eddddy

maxineL wrote: »

I have been quoted £200 to replace the premium which i simply don't have. I have tried calling the company to discuss my q's but I'm not having much luck. Would the £2000 be for JUST my flat or for the whole block? How can it possibly be that much??? The compensation I received is £145 so there is a slight discrepancy to say the least!

You probably need to provide a bit more info...

Who quoted you that amount?

Did they give you a quotation because you asked for one? If so, what did you ask for a quotation for?

What does the quotation say?

What company is it that you're trying to call?