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  • FIRST POST
    • MarlaM
    • By MarlaM 10th Jan 20, 6:50 AM
    • 10Posts
    • 1Thanks
    MarlaM
    Joint freeholder doesn't want joint insurance
    • #1
    • 10th Jan 20, 6:50 AM
    Joint freeholder doesn't want joint insurance 10th Jan 20 at 6:50 AM
    Hi there,

    I'm new here, but I have tried to search for any answers to this but I can't quite find the same thing so I hope you may have some advice for me please, thank you.

    I recently bought a flat in converted house that contains two flats. We are both co-freeholders. The other freeholder and I chatted about getting joint insurance but the quotes came back quite expensive, upwards of 800. The co-freeholder said this was too expensive (I agree, but also see the need for it) so they refuse to do this option and say they simply cannot afford that. There is nothing in the lease that says we must have a joint policy, only that it should be insured - whilst this is frustrating, I can't enforce it.

    Obviously I am worried about the many issues separate policies could raise. This is probably a silly question, but is there a loop hole in us getting a policy with the same provider maybe?

    Has anyone else got experience with similar? What did you do? I just want to cover my flat as well as I can in the circumstances.

    Thanks in advance, M
    Last edited by MarlaM; 10-01-2020 at 6:52 AM. Reason: Spelling mistake
Page 1
    • csgohan4
    • By csgohan4 10th Jan 20, 6:58 AM
    • 6,878 Posts
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    csgohan4
    • #2
    • 10th Jan 20, 6:58 AM
    • #2
    • 10th Jan 20, 6:58 AM
    I think you should also consider being worried about future repair costs,


    If they can't afford 400 for split insurance, what are the chances they will share costs for a leaking roof or maintenance? Worrying indeed
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • eddddy
    • By eddddy 10th Jan 20, 7:05 AM
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    eddddy
    • #3
    • 10th Jan 20, 7:05 AM
    • #3
    • 10th Jan 20, 7:05 AM
    There is nothing in the lease that says we must have a joint policy, only that it should be insured - whilst this is frustrating, I can't enforce it.
    Originally posted by MarlaM
    According to the lease, who has to insure the building?

    If the lease says that the freeholder must insure, then as joint freeholders, you have to jointly arrange insurance.


    So what does the other joint freeholder want to do about buildings insurance?
    • AdrianC
    • By AdrianC 10th Jan 20, 8:05 AM
    • 27,546 Posts
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    AdrianC
    • #4
    • 10th Jan 20, 8:05 AM
    • #4
    • 10th Jan 20, 8:05 AM
    It's one thing looking at the 400/ea cost of a joint policy, but how much would 2 x separate policies be? In other words, what's the actual saving that they're making? That's how much value they place on the potential hassle in a major claim...
    • G_M
    • By G_M 10th Jan 20, 10:35 AM
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    G_M
    • #5
    • 10th Jan 20, 10:35 AM
    • #5
    • 10th Jan 20, 10:35 AM
    What is the exact wording in the leases regarding insurance?

    Have you and the other joint freeholder fully understood, and discussed, the issues around insuring separately? eg

    The property burns down.
    You claim on your insurance for your flat.
    He claims on his insurance for his flat.
    The 2 insurers start arguing about the overall cost to rebuild.
    They disagree on their respective shares of liability eg which one pays to demolish and remove the rubble, or which architect, at what price, to employ for the re-build.

    After 6 months of arguing (you being homeless all this time), they finally release some funds, but at different amounts, and in diffenent frequencies, which means the builders work in fits and starts. The whole process takes years..........


    On topof that there is the risk that one of you has 'under insured'. Or one of the insurers believes the other is under-insured.
    Last edited by G_M; 10-01-2020 at 10:37 AM.
    ** If I include a blue link in my post, click and read it before posting a follow-up question. The answer may be in the link! **
    • MarlaM
    • By MarlaM 15th Jan 20, 9:56 AM
    • 10 Posts
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    MarlaM
    • #6
    • 15th Jan 20, 9:56 AM
    • #6
    • 15th Jan 20, 9:56 AM
    Hi, sorry, I didn't get notifications that anyone had replied, so sorry for the delay.

    I don't know the wording off by heart so I will come back with it shortly. But I do know it's very vague because I consulted my solicitor first and she said there is nothing that explicitly says we have to jointly insure, just that we must have insurance.

    It's so frustrating because the co-freeholders are also aware that it cause huge issues but would rather pay less now and "cross that bridge when it comes to it" if the place burns down!

    One thing we were going to both make sure to get is unlimited rebuild cover - I'm not sure if anyone could recommend any other things we could put in place to protect as best we can in the situation we have?

    Many thanks
    • MarlaM
    • By MarlaM 15th Jan 20, 10:02 AM
    • 10 Posts
    • 1 Thanks
    MarlaM
    • #7
    • 15th Jan 20, 10:02 AM
    • #7
    • 15th Jan 20, 10:02 AM
    @AdrianC

    Separate insurance would save us 300 each (It would be around 100) - and that is what they want to do. I don't know their situation with money but they are point blank saying "no way" to it, so it seems I have to lump it.

    They have very much a 'my way or the highway' attitude as they have been in the building for many many years.
    Last edited by MarlaM; 15-01-2020 at 10:05 AM.
    • eddddy
    • By eddddy 15th Jan 20, 10:20 AM
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    eddddy
    • #8
    • 15th Jan 20, 10:20 AM
    • #8
    • 15th Jan 20, 10:20 AM
    I don't know the wording off by heart so I will come back with it shortly. But I do know it's very vague because I consulted my solicitor first and she said there is nothing that explicitly says we have to jointly insure, just that we must have insurance.
    Originally posted by MarlaM
    I suspect that you may have asked the solicitor the wrong question, and therefore got an unhelpful answer.

    The key question is, according to the lease, who has to insure the building?
    • Does the lease say the leaseholders have to each insure their own flat?
    • Does the lease say that the freeholder has to insure the building?

    I would be 99% sure that the lease is clear on this.

    If the lease wasn't clear on this, your solicitor should have been waving a big red flag before you purchased, and your solicitor would have told your mortgage lender, and you would have been refused a mortgage.
    • MarlaM
    • By MarlaM 15th Jan 20, 10:38 AM
    • 10 Posts
    • 1 Thanks
    MarlaM
    • #9
    • 15th Jan 20, 10:38 AM
    • #9
    • 15th Jan 20, 10:38 AM
    I suspect that you may have asked the solicitor the wrong question, and therefore got an unhelpful answer.

    The key question is, according to the lease, who has to insure the building?
    • Does the lease say the leaseholders have to each insure their own flat?
    • Does the lease say that the freeholder has to insure the building?

    I would be 99% sure that the lease is clear on this.

    If the lease wasn't clear on this, your solicitor should have been waving a big red flag before you purchased, and your solicitor would have told your mortgage lender, and you would have been refused a mortgage.
    Originally posted by eddddy
    (Only just grasped how you are doing the quoting! haha)

    Ahh quite possibly. I suppose I presumed she would know what I meant. Ok thank you, I will look back at the wording when I get home from work.

    Thank you for your help, have a good day.
    • eddddy
    • By eddddy 15th Jan 20, 10:43 AM
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    eddddy
    @eddddy

    Ahh quite possibly. I suppose I presumed she would know what I meant. Ok thank you, I will look back at the wording when I get home from work.

    Thank you for your help, have a good day.
    Originally posted by MarlaM

    I'll take a guess at what has happened... but my guess may be wrong.
    • The lease says the freeholder is responsible for insuring the entire building (i.e. one policy for the whole building) That's usually the case.

      Therefore, in this case, the joint freeholders (you and the neighbour) are responsible for arranging the policy.
    • You asked the solictor something like "Should the buildings insurance be in joint names?"

      The solicitor answered something like "The lease doesn't specify that insurance must be in joint names."

    i.e. The full answer is:

    The joint freeholders are responsible for arranging a single insurance policy for the whole building - but it doesn't matter if the policy is in your name or your neighbour's name or your joint names.

    But like I say, you'd need to read the lease and the letter from your solicitor to confirm this. My guess may be wrong.
    • ethank
    • By ethank 15th Jan 20, 2:03 PM
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    ethank
    I had a flat with an absent landlord before. Every tenant insured their own buildings and contents and if there are any issues the insurers can discuss within themselves. Not a problem.
    • G_M
    • By G_M 15th Jan 20, 2:16 PM
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    G_M
    I had a flat with an absent landlord before. Every tenant insured their own buildings and contents and if there are any issues the insurers can discuss within themselves. Not a problem.
    Originally posted by ethank
    'Not a problem' in the sense that a claim never had to be made, or a major claim was made and the various insurers did sort it out between themslves without problems.......

    The potential problem is not in taking out the policy/policies, it's in (major) claim-handling.
    ** If I include a blue link in my post, click and read it before posting a follow-up question. The answer may be in the link! **
    • AdrianC
    • By AdrianC 15th Jan 20, 2:18 PM
    • 27,546 Posts
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    AdrianC
    Separate insurance would save us 300 each (It would be around 100)
    Originally posted by MarlaM
    200 for two separate policies, 800 for a single joint...?

    That doesn't sound right.
    • eddddy
    • By eddddy 15th Jan 20, 2:26 PM
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    eddddy
    I had a flat with an absent landlord before. Every tenant insured their own buildings and contents and if there are any issues the insurers can discuss within themselves. Not a problem.
    Originally posted by ethank
    Did you take professional advice before doing that?

    Was somebody insuring the shared parts of the building (e.g. roof, stairs, hallways)?

    Did you ever make a buildings insurance claim, and if you did, did the various insurers sort out the claim amongst themselves?

    Did you have 'Contingent Building Indemnity Insurance' as well?


    I would be very cautious about following that route, without taking specialist professional advice first.
    • Richard Webster
    • By Richard Webster 15th Jan 20, 2:40 PM
    • 7,498 Posts
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    Richard Webster
    Separate insurance would save us 300 each (It would be around 100) - and that is what they want to do. I don't know their situation with money but they are point blank saying "no way" to it, so it seems I have to lump it.
    Were the insurers told the whole story? I'd be concerned that they might refuse to pay out or cause problems as suggested inan earlier post.

    If you take the view that you don't care about the detail - worry about that if it happens - why bother with insurance at all? The insurance must be right and the insurer must acknowledge the precise postion.
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
    • G_M
    • By G_M 15th Jan 20, 5:57 PM
    • 51,150 Posts
    • 64,155 Thanks
    G_M
    .

    If you take the view that you don't care about the detail - worry about that if it happens - why bother with insurance at all? The insurance must be right and the insurer must acknowledge the precise postion.
    Originally posted by Richard Webster
    Absolutely.


    I suggest you propose to your co-freeholder that you save a bit more money and just forgoe insurance completely.
    ** If I include a blue link in my post, click and read it before posting a follow-up question. The answer may be in the link! **
    • gwynlas
    • By gwynlas 15th Jan 20, 7:08 PM
    • 320 Posts
    • 376 Thanks
    gwynlas
    Joint freeholder doesn't want joint insurance
    Definetly need one policy for the building to cover fire or ioher damage and cost of rebuilding including temporary accommodatuion if needed. Otherwise you have no proof that they have adequate insurance cover particularly as they are arguing about costs, What do sellers say happened previously?
    • MarlaM
    • By MarlaM 16th Jan 20, 6:31 AM
    • 10 Posts
    • 1 Thanks
    MarlaM
    Hi all,

    Thanks so much for all the replies. I thought it best to put replies in one message so as not to spam with lots of replies, but hope this makes sense without doing the quotes.

    @G_M - Yes, sometimes I do feel like saying "let's save money and not get it at all then and see what happens - I happen to have a spare 800k to re-build, don't you!"

    @eddddy - So, I've checked the lease - it says "Each leaseholder must contribute to insuring the building" - but I phoned my solicitor again after chatting with you and she reminded me that she made the vendor take out Contingent Building Indemnity Insurance out for us because she did indeed see a red flag on the lease. (I had forgotten this fact - my apologies for not mentioning).

    @gwynlas - Our vendor bought the property, gutted and renovated it and flipped it for sale quick so they had separate insurance, but I asked what they did with the former long-term owner and they said... a little dodgy... that he insured the whole building just himself by pretending he owned the whole property and they just paid him half.

    @AdrianC - Yes, I agree, it doesn't sound right but apparently freeholder/landlord insurance is expensive regardless of how many flats are under one roof even if both owners live there and it's not rented. If we were 4 flats it would be a lot easier to convince them to pay 200.
    • eddddy
    • By eddddy 16th Jan 20, 7:11 AM
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    eddddy
    @eddddy - So, I've checked the lease - it says "Each leaseholder must contribute to insuring the building" - but I phoned my solicitor again after chatting with you and she reminded me that she made the vendor take out Contingent Building Indemnity Insurance out for us because she did indeed see a red flag on the lease. (I had forgotten this fact - my apologies for not mentioning).
    Originally posted by MarlaM
    OK - but that's not the question I asked.

    I'm not asking who has to contribute to the cost of insuring.

    I'm asking who is responsible for arranging the insurance?
    1. Does the lease say it's the freeholder is responsible for insuring the whole building?
    2. Or does the lease say that each leaseholder is responsible for insuring their own part of the building?

    On the basis that you mention "contributing" - I'd guess it's option 1.
    • MarlaM
    • By MarlaM 16th Jan 20, 7:18 AM
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    MarlaM
    OK - but that's not the question I asked.

    I'm not asking who has to contribute to the cost of insuring.

    I'm asking who is responsible for arranging the insurance?
    1. Does the lease say it's the freeholder is responsible for insuring the whole building?
    2. Or does the lease say that each leaseholder is responsible for insuring their own part of the building?

    On the basis that you mention "contributing" - I'd guess it's option 1.
    Originally posted by eddddy

    Hi, sorry, I couldn't answer because it doesn't say either - There is one very brief paragraph about it and it simply says "leaseholders must contribute towards insuring the building" then goes on to list various items that should be covered. That's it - there's no mention of who is responsible for arranging.
    Last edited by MarlaM; 16-01-2020 at 7:23 AM.
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