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    • Shed78
    • By Shed78 7th Aug 18, 6:08 PM
    • 4Posts
    • 0Thanks
    Leasehold Insurance on a Flat
    • #1
    • 7th Aug 18, 6:08 PM
    Leasehold Insurance on a Flat 7th Aug 18 at 6:08 PM

    we own one of 3 flats in a conversion, "managed" by the same property management firm. Every year we get an insurance renewal bill for around 400 + (with a 19 admin fee).

    All 3 flats have looked into organising our own insurance at a much cheaper rate but the management company have refused. Previously they have said that because our quotes don't include insurance for acts of terrorism then they can't accept it! We're not exactly a prime ISIS target!

    Question is, are they allowed to hold us to ransom over this or are we legally entitled to shop around for our own insurance?
    All 3 flats are in the process of forming a company in order to buy the freehold soon.

    Any help appreciated.
Page 1
    • Zorillo
    • By Zorillo 7th Aug 18, 8:40 PM
    • 521 Posts
    • 348 Thanks
    • #2
    • 7th Aug 18, 8:40 PM
    • #2
    • 7th Aug 18, 8:40 PM
    Check your lease, it may stipulate who has the right to insure the building. But most likely it's the freeholder.
    • eddddy
    • By eddddy 7th Aug 18, 11:30 PM
    • 7,546 Posts
    • 7,573 Thanks
    • #3
    • 7th Aug 18, 11:30 PM
    • #3
    • 7th Aug 18, 11:30 PM
    Assuming your lease says the freeholder (or their managing agent) is responsible for insuring...

    The law says that the freeholder's charge for insurance must be 'reasonable'. So if you can get 2 or 3 quotes for 'Freeholder's Insurance' which are considerably cheaper, that might be good evidence that the charge isn't 'reasonable'.

    You could then challenge the charge at a tribunal.

    Regarding terrorist insurance... I think there was a tribunal case where it was decided that having terrorist insurance was 'reasonable'.

    An example that's often used to justify terrorist insurance:

    If the leases allow subletting, a leaseholder might unknowingly let their flat to somebody who is a terrorist, who uses the flat to make bombs. And there is an unintentional explosion in the flat.
    Last edited by eddddy; 08-08-2018 at 11:20 AM.
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