Joint insurance on flats

lebowski1980

Good morning all

Own 1 flat out of 3 in a converted house on 999 year leasehold.

There is no formal agreement around insurances, sinking fund etc...
I currently take out building and contents but not sure what the other 2 flat owners do.

Just wondering if there should be a joint arrangement between us around insurances? Doesn't seem right that we all have seperate insurance?

Thanks

princeofpounds

There is no formal agreement around insurances, sinking fund etc...

Yes there is. It's called a lease. Now, the formal agreement may be that there is no agreement, but it would be highly unusual if it was totally silent on all topics!


Once you understand the rights and obligations the leases impose on the leaseholders and the freeholder, you can then understand what you have to talk about with your fellow leaseholders and the freeholder.


And who is the freeholder anyway? They are normally the person/corporation who arranges buildings insurance.

eddddy

As above, the lease will almost certainly explain buildings insurance arrangements - and it's usually the freeholder's responsibility.

If there really is nothing about buildings insurance in the lease, you can apply for a compulsory lease variation:

An individual party to a lease can make an application to a First-tier Tribunal (Property Chamber) to vary the lease under the provisions of Part 4 Section 35 of the Landlord and Tenant Act 1987. However the grounds for a compulsory lease variation are limited. The grounds under which you can make an application are:

...

• The insurance provisions of the lease are inadequate.

....

Link:https://www.lease-advice.org/faq/in-what-circumstances-can-i-apply-to-the-first-tier-tribunal-property-chamber-to-vary-my-lease/

Not all leases allow the freeholder to collect payments for a sinking fund. But some people like sinking funds, and others don't.

george4064

lebowski1980 wrote: »

Good morning all

Own 1 flat out of 3 in a converted house on 999 year leasehold.

There is no formal agreement around insurances, sinking fund etc...
I currently take out building and contents but not sure what the other 2 flat owners do.

Just wondering if there should be a joint arrangement between us around insurances? Doesn't seem right that we all have seperate insurance?

Thanks

Are you a co-freeholder or not?

Also, go speak with the other flat owners and find out what they have.

You should really only need one policy that covers buildings insurance for the entire building, and each flat occupier (note occupier and not owner, since for a rented flat it should be tenants taking out contents insurance not the landlord) should each have their own contents insurance.

The co-freeholders should/need to arrange between them for one of them to arrange buildings insurance for the entire building and split the cost equally across the co-freeholders.

Mutton_Geoff

lebowski1980 wrote: »

I currently take out building and contents but not sure what the other 2 flat owners do.

What does your buildings insurance cover? The whole building? I'd be surprised if the policy was valid under the circumstances. The insurer would want to know that you didn't own part of it and that other people lived in it.


For that reason, the freeholder should take out cover, not the tenants.

G_M

Nothing toadd really:


* who is the freeholder?
* what does the lease say?
* what does your insurance cover?
* what did the other 2 leaseholders say when you discussed this with them?

lebowski1980

Thanks so much for replies. Not a co-freeholder, just a leaseholder.

* No ground rent charged at the moment so will need to check paperwork as freeholder in unknown but it's probably in the conveyancing pack somewhere! The last named freeholder i've seen was quoted from the 1930's
* Will have to check lease
* insurance taken out for whole building but not sure if they know it's 1 flat out of 3 in the building
* other leaseholders are distinctly quiet but I'll need to get something out of them.

[Deleted User]

In case it helps, we purchased a leasehold flat this year in a building with only two flats (house converted in the 1980's) previously both flats had always had separate building insurance.
However, our solicitors advised us that this would make both lots of insurance invalid in the event of a claim.
So the freeholder, who also owns the upstairs flat, took out cover for the whole building and we paid our half, more as a gesture of goodwill than anything else. We could have insisted that they pay, but decided not to as it was a fairly small sum and we wanted to keep everything amicable.

AlexMac

As every one of the 5 leasehold flats we've owned (2 built as flats, 3 conversions) had a lease which clearly stated;

who the freeholder is?
who insures the building overall (always the freeholder in my experience)?
who maintains the overall external and structural elements of the building - again, in my experience always the freeholder - and what elements are their responsibility; e.g roof, gutters/ downpipes, external painted or rendered surfaces and windows, any structural or rising damp...and any communal areas of grounds
how these costs are to be shared (equally? Pro-rata to size or Rateable Value of flats...?

So even if the lease is ancient, I find it hard to believe these aren't mentioned. Or put another way, how your solicitor failed to report to you on whether these basic protections are in place? Failing to realise a lease was silent on these (and many other) points or even just bunging you a "conveyancing pack" without comment means they weren't doing their job.

Of course, none of this matters, until...

a) - the building burns down
b) - a sewer leaks and undermines the foundations
c) - the roof needs renewal and the top floor owner refuses to cover all the costs, or
d) - a plumbing leak from one flat to another rends part of the building uninhabitable for months, with £20k_ of repairs, lost rent or alternative accommodation costs..

and while a) and b) are hopefully unlikely, c) - the roof bit at least -is inevitable eventually, and d) happened in my last shared freehold. Luckily our insurance was watertight (to coin a phrase) and AVIVA sorted the lot!

lebowski1980 wrote: »

... will need to check paperwork as freeholder is unknown but it's probably in the conveyancing pack somewhere! The last named freeholder i've seen was quoted from the 1930's....

So find that lease and the original solicitor's report to you (they did report on lease conditions and title, didn't they...?)

AdrianC

Your biggest issue here is the absentee freeholder... Everything else is just a symptom of that.

When did the three flats last change hands?

eddddy

lebowski1980 wrote: »

* No ground rent charged at the moment so will need to check paperwork as freeholder in unknown but it's probably in the conveyancing pack somewhere! The last named freeholder i've seen was quoted from the 1930's

You can pay £3 to download the freehold title register, which will tell you the details of the current freeholder:

https://eservices.landregistry.gov.uk/eservices/FindAProperty/view/QuickEnquiryInit.do

lebowski1980 wrote: »

* insurance taken out for whole building but not sure if they know it's 1 flat out of 3 in the building

You need 'Block of Flats buildings insurance' which is normally arranged by a broker.

TBH, you've probably wasted your money if you've just got standard home insurance for the building, because the insurer won't pay a claim on a block of flats.

(The insurer might even cancel the policy if they find out, or if you make a claim. Having a cancelled insurance policy against your name can cause you problems in the future. You might want to consider quietly cancelling it yourself, without telling the insurer why.)

lebowski1980 wrote: »

* other leaseholders are distinctly quiet but I'll need to get something out of them.

If the freeholder really is absent, you really need to get quotes for 'block of flats insurance' and try to persuade the other two leaseholders to contribute 1/3rd of the premium each.