Type of Insurance? Freehold of Building (2 Flats)

Caracal

Morning all

THere's probably an answer to this somewhere but I couldn't find a matching thread. 

We (FTBs) have just recieved draft contracts etc from solicitors and our mortgage offer is due within the next week. So we need to start thinking about insurance.

The building is a victorian semi-detatched, split into two flats. We are buying the upper flat and will have the freehold for the whole building, subject to the lease of the groundfloor flat. Nationwide are ok with this, it doesn't seem to be causing a problem because legally we own the entire building so there's no issue with flying freeholds etc. The two flats share the cost of the buildings insurance/repairs equally. The current insurance policy is paid in full and valid until next February - it's a Property Owners Insurance policy from Aviva.

Q1. Will we need to take out a new policy when we move in? Or are we covered by the existing policy until it expires? If so, do we need to change the name/get the current owner to change the name?

Q2. When it comes to renewal, in this situation are we considered landlords because of the lease of the flat below us? If yes...

Q3. ...What kind of insurance policy is required here? Presumably not standard buildings and contents. Are LL Insurance and PO Insurance the same thing?

Hope I've given enough info! All help appreciated  Happy Sunday!

MovingForwards

1. New insurance 
2. Freeholders
(covered on your other thread).

3. I've just done a quick internet search for "freeholder insurance" and loads popped up, plus a stack of information.

eddddy

Caracal said:

The two flats share the cost of the buildings insurance/repairs equally. 

Have you made yourself familiar with the laws on demanding service charges (e.g. for insurance) from leaseholders?  If you don't do it correctly, the downstairs leaseholder isn't required to pay you.

Although, if you get on good terms with the downstairs leaseholder, they might pay you voluntarily - even if you don't follow the correct process.


If the current buildings insurance policy is cancelled and a new policy taken out, the downstairs leaseholder can't be left in a worse position as a result.

e.g. If there are hefty cancellation fees, you would have to cover those - the downstairs leaseholder shouldn't have to pay towards them.

Also, you will be responsible for making sure that the downstairs leaseholder gets refunded their share of the cancelled policy. So you need to make arrangements to make sure that happens (or pay the refund out of your own pocket).



Hopefully you're up to speed with all the other responsibilities of being a freeholder!

Caracal

Thanks both, appreciate the advice, very informative! 

I want to go into this armed with all the facts and do it to the letter. As a natural worrier I'm going to make sure I understand all the responsibilities we are taking on.

The lease is quite comprehensive and specifies our responsibilities and the leaseholders responsibility in regards to maintenance/share of costs.

It's good to know that theres a legal precedent to follow in terms of asking for part payment of insurance etc. And I always want to make sure I am on good terms with neighbours ☺️

I guess my main concern was exactly TYPE of insurance and if there was a difference between them. Sounds like Freeholders Insurance is the one we need.