Separate Building Insurance For Flat Conversion?

krakaboom

Hello,

I'm hoping someone here can for offer some advice. I own the top floor flat of a Victorian conversion terrace house and share the freehold with the owner of the lower flat. For the last 9 years we've always just bought one building insurance policy for the entire house, then split the premium payments. But the lower flat has recently been bought by a new owner, and for many, many reasons, I would now like to insure just my own flat and would prefer if she insured her own. I've been told by my current insurer that this is not possible. I know it makes sense to insure it together - if the house burns down, it's both our flats that will need to be rebuilt - but I'm still hoping to find a way to do it and keep things separate. Is there any way for it to be done? Thank you in advance.

davidmcn

What do the leases say about insurance?

krakaboom

davidmcn said:

What do the leases say about insurance?

Managed to find this bit in the lease document. I'm really struggling to understand the language 

"To keep the demised premises insured at all times throughout the tenancy in the joint names of the Landlords and the Tenant from loss or damage by fire flood and other risks and special perils normally insured under a Householders Comprehensive Policy with the Legal and General Society Limited to the full value thereof and to make all payments necessary for the above purposes within 7 days after the same shall respectively become payable and to produce to the Landlords on demand the receipt of every such payment and to cause any monies received by virtue of any such insurance to be forthwith laid out in rebuilding and reinstating the demised premises or any part thereof in respect of which such monies shall have become payable or has been received in accordance with the then existing byelaws regulations and planning and development requiremwents of any competent authority then affecting the same and to the satisfaction in all respects of the Surveyor for the time being of the Landlords and to make the deficiency out of his own monies."

Sandtree

I hate the archaic way of writing leases... annoyingly the americans still use this style of language and presentation in all commercial contracts too.

Technically it says you have have to jointly buy a "comprehensive" buildings policy from L&G for the full rebuild cost... the rest is about paying the premiums on time and showing evidence etc.

As its leasehold we'll assume you arent in Scotland where things operate a little differently but just think about it logically... what is the rebuild cost of the upper floor unit if insured independently given there would be no obligation for the bottom floor unit to do anything if say there was a major fire that impacted structural stability of the whole building?

Buy joint buildings insurance and buy individual contents insurance is what the norm is in these circumstances... the buildings will need to consider its two dwellings, plus some common areas possibly, and not just regular home insurance.

Do you have any partnership agreement or articles for the freehold owning company  that govern how the joint freeholders should reach agreements etc?

krakaboom

@Sandtree I'm in London and yes, I understand that conventionally it's joint buildings and individual contents. But I'm having massive problems with the new owner and am wondering if there are any options I'm not aware of. It took 3 weeks for them to give me their personal details just to be added to the policy. I've since paid for the insurance myself - having almost missed the deadline due to the neighbour's delays - and now they're refusing to pay me their share until they've 'read the policy documents' (despite having provided zero input and didn't lift a finger to help look for a suitable policy while I was organising it). It's been weeks now and they still haven't read it or paid me back. I'm dreading the day we ever have to make a claim, and really don't want a repeat next year. 

We don't have any partnership agreements. There's are just two flats in this old Victorian terrace house so I've always just dealt with things on a personal level with the previous owner eg "Should we get this done? Split it 50/50? Okay I'll get some quotes".

Sandtree

I suspect this wont be the last problem by the sounds of it... I would suggest a post over in the house buying section, less focused on the insurance, its an example, and look for advice on how to deal with a difficult new co-freeholder when there are only the two of you.

The Lease agreement is a bit moot at this point because it defines what the freeholders must do for the leaseholders and visa versa but as you are both freeholders and leaseholders its not helpful. It says freeholders have to buy the insurance from L&G it doesnt (and wouldnt) say how the freeholders have to share those costs etc.

krakaboom

@Sandtree Thank you - I suspect you're right about there being more problems ahead, but I can only bring myself to worry about one thing at a time. It really doesn't sound like there's any way out of this; at worse I guess I'll just be swallowing the cost of insuring the entire house on my own. It's not a lot of money, but after so many years of mostly trouble-free cooperation with the previous owner, this new situation is just bringing me down.

Sandtree

Its better to try and nip it in the bud now when you are only taking a few hundred for buildings insurance... wait til you find the roof needs replacing due to wear and tear (so not an insurance claim) and how quickly their hand goes into the pocket then... sure there'll be an argument that its "your roof" given you are top floor.