Compton Group +ground rent +insurance

player

thanks, I will pack the soap

levineg10

We have just bought a property and have received a letter from Comptons stating that we must take Buildings Insurance with their approved insurer Liverpool Victoria. We took out Buildings and Contents cover with Aviva before we knew about this company. They said they will wait till renewal next year but are insisting that we use their own approved insurers Liverpool Victoria.

Please advise what actions we can take?

Bill-J

Hi All & Property man,


Similar to all I have received a letter from "Comton Group" stating I must re-insure with "Liverpool Victoria". I am going to follow "PropertyMan"'s advice and ask for a copy of my ground rent document and ask "Compton" where it specifically state I must insure via them and with "LV" or their recommended insurer.


I will then discuss it with my solicitor and let you all know how I get on.


FYI I have a number of rental properties some freehold some leasehold ground rent / chief rent. I have never had this claim before - however I have been warned of "aggressive ground rent landlords" like this.


I believe they can demand to send a surveyor to your house from (say) London at great expense. Once they see you house has had modifications - an extension / conservatory/ PVC windows etc... the surveyor carries out a very expensive report which you are asked to pay for.


I wonder what will happen if I get my own insurance via "Liverpool Victoria" without the Compton mark up !!??


I also would have like to see a link to the "letter" mentioned in several posts that we send 21 days before to avoid the issue ??


I will let you know how I get on !


kind regards & good luck all


Bill-J RIBA


PS - I don't know how to get rid of the strange letters at the start of my thread "Billll,nxdjkcjdkc" apologies for this !

Bill-J

Hi All again


I have found further documents and policy on the net and a copy of the standard letter you must send to "Compton" within 15 days of renewing your insurance :-


I have attached an extract of my own letter....




I am in receipt of your demand that I should re-insure my property via your approved insurance policy offered by “Liverpool Victoria Insurance Company”.



Under the freedom of information act I ask that you provide a copy of my leasehold and point out where it states that I must insure my property via yourselves and with a company recommended by yourselves.





I also note:-





Commonhold and Leasehold Reform Act





The clause provides that any clause in a lease requiring the leaseholder to insure with an insurer nominated or approved by the landlord will be deemed to be satisfied if certain conditions are met.


They are that the leaseholder must insure the property with an insurer authorised to carry on business in the UK; that the policy must note the interests of both the landlord and the leaseholder; that it must cover the risks that are required to be covered in the lease and the amount of cover must not be less than that required by the lease; and that the leaseholder must provide the landlord with evidence of cover or renewal within 14 days of the insurance being taken out or renewed.


( I'm am not allowed as a new user to post "links" so to use the following please post it into your web browser and remove the spaces:
https: //www .gov.uk /government /uploads/system/uploads/attachment_data/file/9432/leaflet.pdf




Nominated or approved insurer provisions for leasehold houses






Leaseholders of houses who are subject to a ‘nominated’ or ‘approved’


insurer clause, are able to insure the property with the insurer of their choice


providing that certain conditions are met and a notice is served on the


landlord in a particular form within certain time limits.


Briefly these conditions are:


• the leaseholder must insure the property with an insurer authorised to carry




on business in the UK


• the policy must note the interests of both the landlord and the leaseholder


• the policy must cover the risks that are required to be covered in the lease




and the amount of cover must not be less than that required by the lease


• the leaseholder must provide the landlord with evidence of cover or




renewal within 14 days of the insurance being taken out or renewed, and


must provide a new landlord with the notice within 14 days of any request


that is made.
The details of the form and notice are prescribed in Regulations7. The notice
itself must contain the following information:


To: [insert name and address of landlord]


1. I am the tenant/We are the tenants of the house at [insert address].


2. The house is insured under an insurance policy issued by [insert name






of insurer and its registered office or, if the insurer has no registered




office, its head office] who is an authorised insurer within the meaning




of section 164 of the Commonhold and Leasehold Reform Act 2002.


3. The policy number is [insert number].


4. *The risks covered by the policy are:

.




OR


*The risks covered by the policy are set out in the pages attached to


this notice [attach a copy of the relevant pages from your insurance


documents].




(*Delete as appropriate.)


5. The amount of the cover (the sum insured) is £ [insert amount] and it is


provided for the period beginning on [insert date on which cover


begins] and ending on [insert date on which cover ends].


6. Premiums are payable [state how frequently premiums are payable eg


annually, monthly].


7. The amount of the excess under the policy is £ [insert amount].




[It is payable whenever the insurer makes a payment under the policy.]


[It is payable in the following circumstances:]


(Delete this paragraph if no excess is payable. If an excess is payable


every time that the insurer meets a claim under the policy, delete the


third sentence. If an excess is payable only in certain circumstances, delete


the second sentence and specify the circumstances here. If different


amounts are payable in different circumstances, give details here.)




8. The policy has been renewed and was last renewed on [insert date].




OR


The policy has not been renewed and took effect on [insert date].






(Delete the statement that does not apply.)




9. I am/We are satisfied that the policy covers my/our interests.


10. I/We have no reason to believe that the policy does not cover your




interests.


Signature


Date
The notice must be served each year that you wish to use your own insurer,


and failure to serve a notice in the proper form or within the required time


limits may mean that you will have to wait for the next insurance renewal


before the right can be exercised.




Bill-J RIBA

Bill-J

[SIZE=+2]Commonhold and Leasehold Bill [Lords][/SIZE]

Dr. Iddon: I, too, congratulate the Government on having tabled their new clause, which I fully support. The questions raised by My hon. Friend the Member for Bolton, North-East (Mr. Crausby) echo the complaints that I have received from my constituents about the Compton group, which seems to have bought thousands of freeholds throughout Bolton, in both his constituency and mine.
Yesterday, I received a letter dated 18 January from Colin Graham, who lives in Altrincham, not far from Bolton, to say that that company had been operating there, too, for several years. He makes the point that it buys out rights, not for the income from the ground rents which are sometimes called ''builders' pensions''—perhaps others have heard that expression—but to pick out those parts of the covenants that it can exploit to its own financial advantage.
I have one of the letters sent by the Compton group to my constituents and those of my hon. Friend and I should like to read a paragraph from it. Bear in mind that the company does not have to buy these swathes of ground rents, but when it does, it makes complaints. The letter states:

[SIZE=-1]''The validation of thousands of different insurance policies on properties in which we have an interest is unworkable.''
[/SIZE]


If the company is not prepared to work the original covenants, why on earth does it buy the ground rents? The letter continues:

[SIZE=-1]''To enable us to have more effective supervision of compliance with the insurance covenants we will, therefore, nominate and approve only one insurance company, AXA Insurance Ltd.''
[/SIZE]

Column Number: 218

Mr. Cash: The hon. Gentleman has obviously looked into this. Is there any suggestion that there is a substantial commission—
Shona McIsaac: Of course there is.
Mr. Cash: Perhaps, but it has not been raised yet. What it boils down to is that there is a grazing of rents—or whatever the expression is—and at the same time there is a bit of a milch cow to go with the grazing.
Dr. Iddon: I do not need to answer that question. The hon. Gentleman has answered it himself.
A final point made by Mr. Graham is that the letters from the Compton group

[SIZE=-1]''seem to arrive shortly before the individual householder's annual renewal is due''.
[/SIZE]


That is worrying. If one has entered into a contract with a company, how does another company find out that one's insurance is due? I have noticed that just before my insurance is due, whether it is for buildings, contents, car or whatever, I am inundated with bumf. There must be a mechanism whereby companies around the land are fed with renewal dates of people all over the country. Whatever happened to the data protection legislation? This is a terrible practice and at some stage, in another piece of legislation, we should stop it.
Ms Keeble: New clause 17 is intended to deal with the problem of provisions in house leases that require the leaseholder to insure the property with an insurer nominated by the landlord. The problem was raised on Second Reading by many hon. Members, including the hon. Members for North-East Hertfordshire (Mr. Heald), for Cotswold (Mr. Clifton-Brown) and for Meirionnydd Nant Conwy, and my hon. Friends the Members for Burnley (Mr. Pike), for Hampstead and Highgate (Glenda Jackson), and for Bolton, South-East (Dr. Iddon). My hon. Friend the Member for Bolton, North-East also raised the matter strenuously even prior to the arrival of the Bill in the House. There was much interest in the issue, and in finding a way to deal with what was widely perceived to be an abuse of the system.
All Committee members will agree that it is wrong for landlords to exploit a monopoly over the provision of insurance to gain higher commission. At the same time, we recognise that landlords have a legitimate interest in ensuring that leasehold property is insured. The new clause will allow leaseholders the opportunity to shop around for the best deal while providing protection for the landlord's interest.
The new clause provides that any clause in a lease requiring the leaseholder to insure with an insurer nominated or approved by the landlord will be deemed to be satisfied if certain conditions are met. They are that the leaseholder must insure the property with an insurer authorised to carry on business in the UK; that the policy must note the interests of both the landlord and the leaseholder; that it must cover the risks that are required to be covered in the lease and the amount of cover must not be less than that required by the lease; and that the leaseholder must provide the landlord with evidence of cover or renewal within 14 Column Number: 219
days of the insurance being taken out or renewed. Provision is also made for notification of insurance details to a new landlord if the freehold is sold. Those provisions should provide an effective remedy to the widespread abuses that have been occurring, while protecting the legitimate interests of landlords. As the question has been raised, I would say that part 1 of the 1967 Act is wide and covers anything that would normally be regarded as a house.
New clause 15 was tabled by the hon. Members for Guildford (Sue Doughty) and for Torbay. Some of the Government's objections to it have been mentioned in debate. It is clearly intended to deal with the same or a similar problem, but in one respect it goes further: where the lease requires a landlord to insure a house and to recover the cost through service charges, it provides an automatic right to transfer responsibility for insurance to the leaseholder.
Although I have some sympathy with the motives, there could be a disadvantage to that approach. Where houses on an estate are interdependent structures with communal parts, there might be, as in the case of blocks of flats, an advantage to having a single policy covering the whole complex. Otherwise, if one leaseholder fails to insure properly, there might be insufficient funds to rebuild the property if that becomes necessary. I am sure that we have all come across cases in which people have not adequately insured their properties. Where that is the case, we would not want arrangements whereby a landlord or a residents' management company had insured the whole to be fragmented at the whim of individual leaseholders. For that reason we cannot accept the clause as it stands.
It is our understanding that most house leases place the duty to insure on the leaseholder. Where a lease does provide for the landlord to insure, leaseholders can challenge the reasonableness of the insurance premium at an LVT under the provisions of the Landlord and Tenant Act 1985 relating to service charges. Leaseholders' rights in relation to service charges have been strengthened by other parts of the Bill and it is our also our intention to reduce the minimum fee for LVT applications to make it more cost effective to challenge small sums.
I am pleased that it has been possible to table new clause 17.
Mr. Cash: I do not think that the Minister mentioned what I said about bucket shop insurance companies. Subsection (2) states:

[SIZE=-1]''The tenant is not required to effect the insurance with a nominated insurer if . . . the house is insured under a policy of insurance issued by an authorised insurer''.
[/SIZE]


That is further defined in subsection (10). Will the Minister remind us what effect section 19 of the Financial Services and Markets Act 2000 would have in that respect? Under the Financial Services Authority's remit, authorisation seems to be intended to impose some degree of solvency or credibility. That is an important ingredient. I have probably given the Minister's advisers enough time to pop a note to her. Column Number: 220

4.15 pm



Ms Keeble: I have already read out the conditions and safeguards that would protect the insurance level. Our reason for proposing new clause 17 and not accepting new clause 15 is that we want to ensure that proper arrangements are made for the insurance of property. I should point out that we are talking about buildings insurance and not contents insurance.
The note that I have been given says ''to prevent dodgy insurers''. I am not quite sure about the legal definition of ''dodgy''—or of the term ''bucket shop insurance companies''. I want to be sure about that, so I shall write to the hon. Member for Stone giving precise definitions. If he has further questions about the provision, I shall ensure that they are dealt with on Report.
I hope that the Committee welcomes the fact that we have looked carefully at the question of nominated insurers, about which many have expressed concern, and I hope that the hon. Members for Torbay and for Guildford will withdraw their proposed new clause.
Gareth Thomas: I am grateful to the Minister for her exposition. I am not entirely sure whether she has answered my query about the applicability of such a clause to business tenancies.
Ms Keeble: The Bill deals with residential properties. We would need to consult about extending it to business leases.
Gareth Thomas: If I understand the Minister correctly, the Government are prepared to be open-minded about consulting, at a later stage, on a measure dealing with commercial leases.
Mr. Sanders: I am not sure whether I can answer for the Minister.
The Chairman: Order. It is a wide-ranging debate. I merely remind the hon. Gentleman that he was the mover of the lead new clause.
Mr. Sanders: I understand, Mr. Hurst, and no criticism was intended.
I apologise to the Committee for taking time to debate new clause 15, and for having taken some of the Government's limelight—[Hon. Members: ''No.''] It would have been nice if we had been treated as if we had had something to do with it, but it did not happen.
I have no argument with the Government's new clause. Ours tried to go a bit further, but the Minister has explained why the Government do not wish to go that far. New clause 17 will make a big difference to the lives of thousands, perhaps tens of thousands, of leaseholders, and we are glad to support it. I beg to ask leave to withdraw the motion. Motion and clause, by leave, withdrawn

srandall88

Hi Folks ..sorry to be jumping in on this thread, but like others We have had the letters demanding that we inssure through their prefered company. LV.
We have written to them, stating and even sending in our insurance paperwork, Insured through Lloyds.
they have demanded that we take out insurance with them, when asked how much and what is covered/level of cover, have had no response, instead more demands. one of which stated we owed them £60 fee for not insuring through them.
Well Today really done it for me, our only post was a letter from our mortgage company, saying that they have received a notice from compton group saying we are in breach if the insurance covenant, and they are no seeking to pursue us in view to reposes our property.

we really dont know what to do or where to go, we are waiting for confirmation that our insurance will cover legal.

any advise would be much appreciated.
many thanks

lembi2001

Hi all

I have recently received one of these ridiculous letters and after reading this thread I was able to challenge these lowlifes and play them at their own game.

Compton Group have demanded that I insure my property with LV as they are the approved insurers at this moment in time. I requested a copy of the Leasehold showing the portion pertaining to the insurance requirements. My Leasehold (dated 1878 and valid for 990 years) does in fact state that the building must be insured by the Lessor's approved agent:

"The lessee to insure and keep insured the buildings to be erected upon the said plot of land to the amount of two third parts at least the value thereof in some public office (to be approved by the lessor) for insurance against damage by fire and as often as required to produce to the lessor or his agent as aforesaid the receipt for the premium for such insurance for the current year.....

Now I am not a solicitor so forgive me if I interpret this incorrectly but to me, the leasehold states that I must insure with an approved agent for damage against fire only. With this knowledge I rang LV directly and asked them for a quote against fire damage to the building only. LV are unable to offer this service as they only do buildings insurance which includes fire damage protection amongst other things. I thanked them for their time and then went back to Compton Group.

I advised them that their "approved" company was not able to provide the insurance required under the covenant of the leasehold and they informed me that they were aware of this. I asked them when they took the leasehold on and they informed me it was May 2014 and I asked them why it took so long for them to start enforcing the leasehold. I was informed that they are under no time limits to contact the lessee's that the leasehold affects.

This is the kicker though, they are under no legal obligation to advise those affected of the leasehold legislation. All they advise is that you seek legal advice. I have major issues with this as there are a number of elderly people living on the leasehold land (affects 3 different streets) and I can pretty much guarantee that they are unaware of this legislation and will just insure with LV as that is what the letter states to do.

I have managed to find the required documentation to send to these vultures and have signed up to this forum just to share the link.

The Lease Advice Website contains lots of useful information regarding leaseholds and the legal implications of them. ww w.lease-a dvice. org

The document in question is here:
ww w.lease-adv ice.org/docum ents/uksi_20043097_en. pdf

(sorry for the malformed links, I can't post actual links as a new user, just copy and paste and remove the spaces)

Hopefully this will help others who are bullied by this company.

zender

Had a property's service charge and ground rent transferred to them. They recently tried to overcharge me to by £400, have inept staff and try to cover their tracks when mistakes are made.

Rija2

We believed that we had bought a freehold property back in 2004. We have never been asked to pay ground rent and have always insured the property under the terms of our mortgage provider. In October 2012 we changed our insurance provider, which was also acceptable by our mortgage provider. We recently recieved a letter from Compton Group saying that we should be insured with LV, which is their current approved insurers. On telephoning them to get more details, we were also informed that there was an outstanding amount of ground rent on the property. After telling them that we were under the impression that we had the freehold, we were told that they had taken on the lease in 2010. It seems that not only has it taken them 4 years to decide that our insurers are not acceptable, it has also taken them 6 years to decide that we need to pay ground rent, although they have never contacted us about this so, as yet we have no idea how much this will be. We are at a bit of a loss what to do next. Any ideas please????

player

advice would be to pay the ground rent on time and in full.


And ignore any letters about with whom you should insure your house.