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  • FIRST POST
    • smintel
    • By smintel 15th Jan 20, 9:12 AM
    • 1Posts
    • 0Thanks
    smintel
    Expensive building insurance arranged by freeholder
    • #1
    • 15th Jan 20, 9:12 AM
    Expensive building insurance arranged by freeholder 15th Jan 20 at 9:12 AM
    Hi there,

    I own a flat that I previously lived in and now rent out. The freeholder organises building insurance and sends a bill every year. I have never really questioned this before, but this year it occurred to me that the insurance price is rather high.

    For the whole building, a victorian house that has been converted into three flats, the price is 1824 of which I am being charged a third, plus a 10% management fee, a total of 668

    I checked on some price comparison sites and building insurance for my flat alone can be purchased for around 230

    Two questions - first - the sites I checked are for owner occupied buildings, is there a recommended price comparison site for freeholders building insurance, as that would be a fairer comparison.

    Second, I suspect the freeholder is just lazily renewing the insurance every year without looking for better deals, as he has no incentive to do so. Is there anything I can do to about this or do I just have to accept the deal he finds?

    I have emailed him to ask him to look for better deals and have provided my quote, but as yet he has not replied.

    thanks,

    S,
Page 1
    • ACG
    • By ACG 15th Jan 20, 9:24 AM
    • 19,866 Posts
    • 11,397 Thanks
    ACG
    • #2
    • 15th Jan 20, 9:24 AM
    • #2
    • 15th Jan 20, 9:24 AM
    You are comparing an owner occupied flat with a house converted to flats - the prices will be different.

    Call an insurance broker and give them the details to see what quote they get. If significantly lower, go back to the freeholder and see what they say. If they are being lazy, get the other owners involved.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Alter ego
    • By Alter ego 15th Jan 20, 9:31 AM
    • 2,720 Posts
    • 2,699 Thanks
    Alter ego
    • #3
    • 15th Jan 20, 9:31 AM
    • #3
    • 15th Jan 20, 9:31 AM
    The freeholder is insuring HIS building. He has the right to choose HIS insurer.
    Loose means not tight, Lose means something is lost, simples no?
    Ignore me if you like, it's not the real me anyway.
    • silvercar
    • By silvercar 15th Jan 20, 10:01 AM
    • 39,800 Posts
    • 164,136 Thanks
    silvercar
    • #4
    • 15th Jan 20, 10:01 AM
    • #4
    • 15th Jan 20, 10:01 AM
    I checked on some price comparison sites and building insurance for my flat alone can be purchased for around 230
    I don't see how it is possible to insure the building of your flat alone.
    • eddddy
    • By eddddy 15th Jan 20, 11:54 PM
    • 8,918 Posts
    • 9,312 Thanks
    eddddy
    • #5
    • 15th Jan 20, 11:54 PM
    • #5
    • 15th Jan 20, 11:54 PM
    Insurance for a building converted into flats is always more expensive than insurance for the same building used as a single house.

    The usual explanation is claims experience. For example, flats seem to have a high number of claims for 'escape of water'.

    (There may have also been some previous claims that you don't know about, which may be pushing up the premium.)



    However, the law says that the charge made by the freeholder for insurance must be 'reasonable'.

    So do as ACG suggests, and get a few quotes yourself. If your quotes are much less than the freeholder is paying, that suggests that the amount that the freeholder is paying is not 'reasonable' - and you should challenge it.
    • dacouch
    • By dacouch 16th Jan 20, 6:50 AM
    • 20,780 Posts
    • 12,869 Thanks
    dacouch
    • #6
    • 16th Jan 20, 6:50 AM
    • #6
    • 16th Jan 20, 6:50 AM
    Judging by the premium it sounds like it's in London, if so there is a good chance it has had a subsidence claim in the past
    • Susan1942
    • By Susan1942 17th Jan 20, 11:34 PM
    • 1,155 Posts
    • 270 Thanks
    Susan1942
    • #7
    • 17th Jan 20, 11:34 PM
    • #7
    • 17th Jan 20, 11:34 PM
    The Freehold on the apartments I live on was sold about 4 years ago. It has been sold 3 times in the 21 years I have lived here. The new Landlord appointed a new management company as well.
    I live in one of 3 apartment designated as Penthouses
    I was paying about 260 for annual.buildings insurance
    This has now gone up to 645 plus 19.99 admin fee.
    There would seem to be nothing we can do about this.
    Our Residents Committee discussed this with them but says the property was undervalued..Despite.taking this to various bodies it seems there is nothing we can do except pay it.
    The 19.99.admin.fee really annoys us. There are 42 apartments Simon my opinion really a rip.off.
    • eddddy
    • By eddddy 18th Jan 20, 1:08 AM
    • 8,918 Posts
    • 9,312 Thanks
    eddddy
    • #8
    • 18th Jan 20, 1:08 AM
    • #8
    • 18th Jan 20, 1:08 AM
    There would seem to be nothing we can do about this.
    Our Residents Committee discussed this with them but says the property was undervalued..Despite.taking this to various bodies it seems there is nothing we can do except pay it.
    Originally posted by Susan1942
    Which various bodies, and why did they say you couldn't do anything?

    If you think that a service charge (including insurance) is not reasonable, you can challenge it at a first-tier tribunal.

    But you can't just say that the charge is too high, you have to provide evidence.

    Here's some more info: https://www.lease-advice.org/advice-guide/service-charges-other-issues/
    • Susan1942
    • By Susan1942 21st Jan 20, 7:57 PM
    • 1,155 Posts
    • 270 Thanks
    Susan1942
    • #9
    • 21st Jan 20, 7:57 PM
    • #9
    • 21st Jan 20, 7:57 PM
    All this was thoroughly investigated including legal advice taken by our Residents Committee. The various organisations that we are members of could do nothing about the situation.
    I pay 845 per quarter maintainence Plus ground rent of 97.50 plus Ground rent for my underground garage space and 49.50.maintainence per quarter. 3 of us who live in the larger flats pay more plus on F band Council Tax.
    Their argument is that the complex was underinsured and that was the end of it. There were complaints from.all of the residents
    There are 6 1 bed apartment but the majority are 2 bed. We have a sinking fund which covers large maintenance works. 27,000 was spent on a major overhaul of of one of the lifts. We also.have a redecorating fund..Every 5 years the outside of the development is painted. In other years one of the 5 parts of the development has the halls staircase outside of the doors etc..The development has a part time manager A reception area a laundry a guest suite and a residents lounge.. The furniture in the public areas plus the equipment in our laundry. The current Landlord accused our committee of forensic examination of the accounts. Our committee are very proactive and they need to be to make sure that money is taken from the correct accounts..There was great resistance in producing these accounts. The Management said we were not entitled to be provided with them. However after legal.advice they were forced to supply them. There are always errors but our very.able committee take them to task..We are very grateful for the many hours they spend meeting with Management.
    • eddddy
    • By eddddy 22nd Jan 20, 10:07 AM
    • 8,918 Posts
    • 9,312 Thanks
    eddddy
    Their argument is that the complex was underinsured and that was the end of it. There were complaints from.all of the residents
    Originally posted by Susan1942
    Was the complex underinsured before?

    If so, the leaseholders should be pleased that the freeholder has corrected the situation by getting the correct level of insurance.

    Otherwise, if the worst happened, and the complex burnt down, you'd all be homeless and out-of-pocket.


    (In that situation, you could have sued the freeholder for damages for being underinsured, but the freeholder may have had insufficient assets to pay all the claims and just gone bankrupt.)
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