Buildings insurance on share of freehold advice

Td731

Hi,

I am completing on a share of freehold flat in a few days where the freehold is owned by a management company (that I will become a director of). It’s just a house converted into two flats

The owner of the other flat rents it out and has sent me a renewal policy for the buildings insurance for the whole building which is actually landlords insurance (but has a buildings part within it) 

I am intending to live in the flat and not rent it out so I am confused if this is the correct thing to do or not?

thanks! 

kingstreet

The freeholder (or landlord) is responsible for insuring the entire building. The intended use of one or more of the leasehold flats within the block should have no relevance. That would impact only the contents insurance of the individual leaseholder.

You need to be able to put on and take off each hat. Under one hat you are a part-owner of the freehold and under the other you are the leaseholder of Flat X.

poseidon1

Td731 said:

Hi,

I am completing on a share of freehold flat in a few days where the freehold is owned by a management company (that I will become a director of). It’s just a house converted into two flats

The owner of the other flat rents it out and has sent me a renewal policy for the buildings insurance for the whole building which is actually landlords insurance (but has a buildings part within it) 

I am intending to live in the flat and not rent it out so I am confused if this is the correct thing to do or not?

thanks! 

In this scenario it should be building insurance policy ( in the name of the company), with a subclause purely  covering loss of rental for any flat that might happen to be rented at a time when the building is destroyed or substantially damaged. 

 If  in your scenario you are saying the policy has been set up as predominately landlord's letting insurance  with all the bells and whistles specific to that type of cover with buildings cover as an add on rider, that is the reversal of what should be in place.

I handle insurance for a converted house in a number of flats owned by a freehold company. One of the flats is let but the cover for loss of rent is merely a rider to the primary buildings policy. The landlord of the let unit has his own entirely separate landlord's cover for other risks specific to the letting of that flat ( ie tenant damage, failing to pay rent etc).

You has a owner occupier of your flat  should not be subsidising the cost of the other owner's landlord's all risk insurance. If the policy is exactly as you state, he is pulling a fast one at your expense.