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Buildings insurance excess

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Comments

  • Because its your problem... the freeholder could totally replace all the pipes in the building but before that happens you'd find a Section 20 Major Works consultation notice coming through and you and your fellow 200 leaseholders would be reimbursing the cost of the works plus normally some cost for oversight of the works my the freeholder/managing agency. 

    In our previous flat there were an ever increasing number of leaks coming from the roof and the wooden windows were rotting more each year but the freeholder's quote for the scaffolding alone was over £1m and that plus the actual repair/replacement costs would have to be paid for by the leaseholders and so had deemed it better to be paying for the occasional spot repair and defer the massive 5 figure sum per leaseholder for a few years. 

    No, there is nothing that they could check to just see the excess, they'd need to ask for a copy of the policy to find out. I think you are thinking of CUE which is a database used by Motor, Home and a few other classes but your freeholder will not be buying "Home" but a form of Commercial Property insurance known as "Block" (or block of flats to give its full name) and doesn't go into CUE. 
    Thank you so much for your response. It all feels rather wrong that the freeholder can charge all sorts of extortionate amounts for lease renewals etc but not have to bear any of the costs for repairs in the building they own. But I guess that’s my problem for buying a leasehold. 

    Good to know re the lenders. I guess I will find out when I/someone makes an application for a new mortgage on the place! 

    Really appreciate you taking the time to write all this out, thank you. 
  • Do you know the reasons behind these apparently multiple leaks, why have their been so many?

    For what it is worth if you take out buildings insurance on a normal house, then normally it automatically covers all leaks, maybe with a few hundreds Pounds excess. Although some of the very cheap policies have some caveats.
    However I presume if multiple claims have been made recently then it would be a different story.
    Faulty appliances and plumbing issues, apparently. I don’t have anymore details than that… 
  • DullGreyGuy
    DullGreyGuy Posts: 10,186 Forumite
    First Post First Anniversary Name Dropper
    Because its your problem... the freeholder could totally replace all the pipes in the building but before that happens you'd find a Section 20 Major Works consultation notice coming through and you and your fellow 200 leaseholders would be reimbursing the cost of the works plus normally some cost for oversight of the works my the freeholder/managing agency. 

    In our previous flat there were an ever increasing number of leaks coming from the roof and the wooden windows were rotting more each year but the freeholder's quote for the scaffolding alone was over £1m and that plus the actual repair/replacement costs would have to be paid for by the leaseholders and so had deemed it better to be paying for the occasional spot repair and defer the massive 5 figure sum per leaseholder for a few years. 

    No, there is nothing that they could check to just see the excess, they'd need to ask for a copy of the policy to find out. I think you are thinking of CUE which is a database used by Motor, Home and a few other classes but your freeholder will not be buying "Home" but a form of Commercial Property insurance known as "Block" (or block of flats to give its full name) and doesn't go into CUE. 
    Thank you so much for your response. It all feels rather wrong that the freeholder can charge all sorts of extortionate amounts for lease renewals etc but not have to bear any of the costs for repairs in the building they own. But I guess that’s my problem for buying a leasehold. 
    How often do you think leases are extended?

    The actual money to the freeholder if we were to do a statutory 90 year lease extension would be £3,000 or £33 a year. There are 32 flats in our development so in principle the freeholder could be earning the princely sum of £1,067 a year on average for the whole building (assuming no one lets their lease drop too short). In reality all the flats have still got 110 years leases left so will be another 15-20 years before the freeholder gets any money from lease extensions. 

     With no ground rent to actually buy the freehold would likely actually be cheaper than extending the leases which goes to show how unvaluable freehold is. 

    How much effort would you put in for £1,067 a year income? Would you think of putting your own hand into your pocket to pay the £15,000 for roof repairs? £4,000 for lift repairs? Replumb the whole property?
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