House bought and paid for - ground rent providers enforcing specified insurance policy

cooks144

We are lucky to be in a position where we bought our house nearly twenty years ago and we are mortgage free.  The property is leasehold with a ground rent charge of £1 per month.
New providers have taken over the ground rent administration (they are not the leasehold owners, merely the administrators of the lease: collecting ground rent etc).
We have received communication from them that as of our next insurance renewal date we HAVE to place our insurance on their block policy with Zurich or purchase insurance via Zurich on a single policy.
Do we have to do this?
We are currently with More Than and are happy with this provision and the policy wording. We went direct with More Than.
Zurich cannot be insured with on a direct basis, they only use insurance brokers.  Thus are the ground rent administrators then acting as brokers?  Will they then have to disclose the fees they are earning via Zurich?   Is this treating customers fairly by forcing us to use their insurance policy (if they are acting as a broker then surely they have to abide by the TCF principles)?
I'm at a loss - I have told them our insurance policy is with an FSA approved insurer and is more than adequate for the cover required but they have just stated that we must move to Zurich at our next renewal.

cooks144

PS if you see that there is a more adequate heading to post this question under please advise and I will move it
thank you

eddddy

cooks144 said:

We have received communication from them that as of our next insurance renewal date we HAVE to place our insurance on their block policy with Zurich or purchase insurance via Zurich on a single policy.
Do we have to do this?

Ask them why Section 164 of the Commonhold and Leasehold reform act 2002 doesn't apply to your lease.

164 Insurance otherwise than with landlord’s insurer

(1)This section applies where a long lease of a house requires the tenant to insure the house with an insurer nominated or approved by the landlord (“the landlord’s insurer”).

(2)The tenant is not required to effect the insurance with the landlord’s insurer if—

     (a)the house is insured under a policy of insurance issued by an authorised insurer,
     (b)the policy covers the interests of both the landlord and the tenant,
     (c)the policy covers all the risks which the lease requires be covered by insurance provided by the landlord’s insurer,
     (d)the amount of the cover is not less than that which the lease requires to be provided by such insurance, and
     (e)the tenant satisfies subsection (3).

Link: https://www.legislation.gov.uk/ukpga/2002/15/section/164

It should apply to your lease - meaning you don't have to use the Landlord's nominated insurer - but the Landlord might be saying something like you haven't informed them (given them notice).

You have to give notice in a prescribed format: https://www.legislation.gov.uk/uksi/2004/3097/schedule/made

Your landlord can charge you an admin fee for dealing with your notice - but it shouldn't really be more than about £25 or £30.


You could contact LEASE for a free 15 minute phone call to get advice on this, if you want: https://clients.lease-advice.org/#/


Also see: https://www.lease-advice.org/faq/i-am-a-leaseholder-of-a-house-and-my-lease-requires-me-to-arrange-insurance-with-an-insurer-nominated-or-approved-by-my-landlord-is-there-any-way-of-choosing-my-own-insurer/

tooldle

Are policy costs comparable between the two suggested options, and your current preferred provider? 

eddddy

... also, you could consider buying the freehold of your house to avoid this kind of hassle in the future.

LegallyLandlord

Great advice from @eddddy both on the detail and about buying the freehold. 

This really is shocking. What a scam. It’s the kind of thing that should be reported in the media. 

This group is active on Twitter about leasehold reform

https://twitter.com/nlc_2019?s=21&t=QN2HsqeLZAKbgRq03e6sGw

dimbo61

Back in the old days Lenders would sell you buildings and contents insurance with No choice

lincroft1710

dimbo61 said:

Back in the old days Lenders would sell you buildings and contents insurance with No choice

Yes, I remember this. Their excuse being that they wanted to ensure the property was correctly covered