Neighbour and I buying freehold: building insurance?

Will1v

Hi everyone,

I've bought a flat last year in a Victorian house where there's also a lower-ground/ground flat. The other flat has just been bought and the new landlord and I are going to buy the freehold from our current freeholder. The current freeholder is going to cancel the building insurance so we need to take one together.
I can't find any information about how to do that:
- should I get in touch with an insurance broker?
- how do 2 share of freeholders pay the insurance premium? can you setup a common bank account where each one sends 50% of the premium and there's then a Direct Debit from that account to the insurer? Or will the insurer accept to have two Direct Debits for each flat?
- how do you estimate how much it would cost to rebuild the house?

On a side note: I was told once that it was wise to get a 999 lease extension straight after buying the (share of) freehold, for tax efficiency, but I forgot to ask why: would anyone know? I asked the solicitor in charge of the freehold purchase but they don't seem to be aware.

Thanks,

William

Thrugelmir

Have you considered how you will share costs such as repairing the roof ? 

Will1v

I think that under the current lease, both flats would bear the costs relating to any common space (roof, foundations, etc...), except for the roof terrace which is demised to my (top) flat, so that's what I would assume still happen. 

notrouble

"the new landlord and I are going to buy the freehold " you mean the new leaseholder....?!

Putting that aside, if you buy the freehold, your leases do not change. So arrangements for insurance, repairs, allocation of costs etc do not alter.

It's simply that you both put on your freehold hats and ararnge things, and then put on your leasehold hats, and pay the freeholder (yourselves) acording to the leases.

For insurance, yes, best to get quotes from several brokers. Comparison sites don't do well with quotes for buildings that are split into leases/flats.

Lease extensions? Well, what are the current leases? Are they the same for each flat?If not, it may be that one flat should contribute more than the other if their lease extension is greater/more urgent. But essentially, yes, you can jointly agree to extend.

Ownership of the freehold can either be in joint names, or via a limited company in which you are equal shareholders. I suggest you do some research into the pros/cons, as well as into what is involved in freehold management. A good start is

https://www.lease-advice.org/advice/find-the-right-information-for-you/?step-option=61

Will1v

Thanks notrouble. 

Yes I meant “leaseholder” rather than “landlord”. I understand that the leases are still there and that we will both be joint freeholders as well as leaseholders. Both of our leases have around 120 years left. 

I will look at the link you sent tomorrow, but I think we’d both rather have the freehold in joint names rather than having to setup a company. 

Do you know brokers you’d recommend for building insurance?

 Many thanks for your help and advice on this.