Buildings insurance in a lease hold flat

VXman

My son has just bought  a flat  (with our help so no mortgage) on the 5th floor (top) of a Victorian terrace in Brighton.  It's a leasehold flat. Not have any experience of leasehold personally so forgive my ignorance. Does he need buildings insurance for his flat or is it all covered by the leaseholder?   Say for example there was a fire that destroyed his flat - is he responsible?

loubel

Your son is the leaseholder. He needs to read his lease (or at least the report sent by his solicitor explaining the key terms) to find out who is responsible for insurance. It is usually, but not always the freeholder who insures. He will still need contents insurance.

NameUnavailable

Leasehold is like a long term rental agreement. He doesn't own the flat, he owns a lease to live there for X years and (most likely) has to pay a service charge and ground rent (which might be a peppercorn).

The freeholder owns the actual building and is responsible for the upkeep and for insuring it - the costs are charged back under the service charge.

Exceptions will be if it is share maintenance, or Right to Manage, or shared freehold. In these cases the details differ but ultimately the building still has to be insured by the freeholder or RTM company.

eddddy

Your son's lease will specify who is responsible for buildings insurance.

Usually the lease says it's the freeholder (i.e. the owner of the whole building), but occasionally the lease says each leaseholder (i.e. the owner of each flat) is responsible for insuring their own flat.


But TBH, if it's a conversion - it's very, very likely to be the freeholder's responsibility. And one insurance policy will cover the entire building, including all the flats and the communal areas.

The freeholder might employ a managing agent to deal with insurance etc.

TBH, your son was probably given a copy of the insurance policy during the conveyancing process. But if he wasn't, he can request it from the freeholder.



So if your son wants to make a buildings insurance claim relating to his flat (e.g. because a fire has damaged his flat, or water has escaped into his flat) he has to do it via the freeholder.

There will be an excess to pay on any insurance claim (which is often quite big). If the damage was just to your son's flat, usually your son would have to pay the whole excess. If two flats were damaged in the same incident, the two flat owners might split the excess between them, etc. (Unless the lease says otherwise.)