Flying Freehold Insurance Cost

flying_free

Hi,

Hoping to get some advice. I live in a flying freehold property and pay for insurance through the management company, who have recently taken over from a previous company.

My property is a one-bed/bathroom, which flies over an underpass giving access to the car park for me and neighbours. The access is via front door leading to a staircase, which is only part of property not flying. Not certain on current market value, but I'd estimate £190-215k.

The insurance paid is a variable that is added onto the management costs, which has risen over the years. The latest figure was a big rise in cost, so I queried it.

I was sent documents from the old management company - they were insuring mine and another identical property through the same policy, but with incorrect street (non-existant) and postcode (for three roads away, the 3-4 bed properties). That document listed the declared value of the two properties as close to £1,000,000 and the insured amount as £1,400,000.

The new company reissued the statement of fees, splitting costs between myself and the other property - changing my cost to £1,200 (instead of £1,700 they quoted originally). I've requested the documents for the current insurance policy from the new management company, along with their reinstatement evaluation (they mentioned this in an email response when I asked for documents, but didn't send any - just assurances everything was in order this time).

Is it too long ago to query the old company, who insured with incorrect details? At a loss of what to do next, any advice appreciated.

eddddy

Just to double check - a property like that would normally be leasehold, but you say yours is (flying) freehold?

(The situation is very different for freehold vs leasehold properties.)

And as it's a freehold house - it's unusual that the management company arrange buildings insurance, it would usually be the home owner.

But anyway, if it's freehold, I guess you signed a deed when you bought the property agreeing to pay estate management fees, including your contribution to insurance costs. That deed is essentially your contract. So you need to read the deed - to see if the old management company breached the contract by overcharging you (or perhaps were negligent).

Assuming you signed a deed, who is the 'other party' that you agreed to pay? Was it the management company?

Assuming you signed a deed with the management company when you bought the property, when a 'new' management company takes over from an 'old' management company - the new company should usually take over all the old companies liabilities.

So any claim for breach of contract in the past (e.g. overcharging) should probably be directed to the new management company.

(The new management company might then make a claim against the old management company - but that's not your problem.)

flying_free

Thanks for reply, I'll look into the deed again.

To answer some:

Yes, it is a freehold - but part of the purchase agreement was it could revert to leasehold if I don't pay the management fees on time. Lawyer flagged this at time of purchase.

The "other party" agreed to pay was the management company, as far as I remember.

As the majority of the property is over public land (a driveway into car park) I was told that the builder/management company would need to arrange insurance as I don't own the land underneath my property.

I am also looking at finding someone who can give me a rebuild valuation of the property or advice on the insurance.

eddddy

Ok - so based on what you say, it is the deed you signed that's important.

The deed might be very precise, so it's easy to see if the management company has done things right or wrong.

Or it might be vague, so there might be arguments about whether the management company has done things right or wrong.

And based on what you say, it sounds like the current management company will have taken over responsibility / liability for any 'wrong-doing' by the previous management company - so you should take it up with the current management company. (But I suspect they'll try to deny it's their responsibility.)