Joint Insurance Share of freehold

Sapphire189

Hi everyone, 

I am new to this forum. 

I own a flat 1/7 share of freehold and leasehold. "wearing two hats". Other freeholders have tenants and let out their flats. I am owner occupier. Our leases  state, responsibility of "Freeholders" to have "comprehensive household insurance". The lease does not make reference to landlord insurance which is clearly not the same.  It seems most unreasonable that they include their own landlord insurance with the building insurance and expect me as owner occupier to contribute towards it.  

Should I decide to sell my share/flat, other freeholders will then need to complete the  LPE1 form. it includes a request for building insurance details. A potential buyer, who plans to be a owner occupier might be discouraged in buying if the building insurance has add ons,  other landlords insurance.

To counter a foreseeable problem, should I contribute to the building insurance with their same insurance company, but separate from their landlord insurance?  Avoiding a potential problematic situation of having two separate insurance companies in the event of a major claim. Alternatively, should I consider indemnity insurance cover should a buyers solicitor request it as part of a sale agreement? 

I would be interested  to know from a legal perspective if anybody  has encountered a similar situation and how did you deal with it? 

eddddy

Based on what you say, things should work like this:

• The joint freeholders should arrange "Block of Flats insurance" for the building - which is essentially buildings insurance. (Google 'Block of flats insurance' for more details)

• In your capacity as a leaseholder, you (and other leaseholders) should contribute your share of the premium cost (maybe 1/7th each)

• If a leaseholder rents out their flat, they can choose to get Landlord's Contents insurance for their flat, if they want.  That leaseholder would pay the insurance premium for their flat, and it's nothing to do with anyone else

There wouldn't be much of an overlap (if any) between the joint freeholder's buildings insurance and a leaseholder's Landlord's contents insurance.

You mention indemnity insurance... What would you want it to cover?

Sapphire189

Thank you for your reply. 

I understand that "Block of flats insurance"cover would apply as we need to cover the whole building jointly for rebuilding costs. 
I've done some research on block of flats insurance and found two companies,
1) Gallager 2) Landown and  shall look into it further. 

Of course, I won't know until I have seen a copy of the insurance policy, whether the landlords have included loss of rent and/or contents cover. My neighbours are in a similar position, however their landlord premium is kept completely separate.  

If as you say, not much overlap, with landlords contents then I'm not splitting hairs. 

Indemnity insurance, from a buyers prospective, I believed they might ask why landlords don't have a separate landlord insurance ? An indemnity insurance would cover any potential issues as I believe landlords insurance should be separate. After all, to them, it's a business investment. But for owner occupiers, like me, its your home. However, your reply suggests a buyers solicitor will be looking for rebuild costs jointly covered. 

I appreciate your advice and  am now less concerned. I am possibly being overly cautious, but need to ensure that the building insurance arrangement doesn't throw up any problems or cause delays in a sale process. 

Thank you for your advice it is most helpful. 

AlexMac

As a shared freeholder who in our last block, took on the role of treasurer (and thus, insurance and maintenance stuff) I was really impressed by Lansdown. 

eddddy

Sapphire189 said:

Of course, I won't know until I have seen a copy of the insurance policy, whether the landlords have included loss of rent and/or contents cover. 

Just to clarify, loss of rent cover is fairly normal in 'Block of flats' insurance.

For example, if the whole block was uninhabitable following a fire,

• a landlord might get 'loss of rent' from the insurer - let's say £1000 per month

• you would get alternative accommodation paid for by the insurer - costing let's say £1000 rent per month

So you and the landlord are both treated equally - you both get a payout equal to £1000 per month.


I don't really follow what you're saying about indemnity insurance. Is this something you've thought of?
Or has somebody mentioned something like 'Contingent Buildings Indemnity Insurance' to you?
Or something else?


In general, Indemnity Insurance pays out if a specified bad event happens and you have a financial loss as a result. 

(An example of a 'specified bad event' would be the council telling you that you have to demolish an extension. The financial loss would be the resulting reduction in the value of your house.)

Sapphire189

Thank you for your comments. This is encouraging I now have a better understanding of the insurance. I will mention Lansdown insurance to the others. 

On indemnity insurance, I had only thought of it, but if we follow the line of joint insurance and as we don't have any major issues with the property then it shouldn't  be necessary. 

This is much clearer now, I really appreciate your comments.

Thank you.