big buildings insurance invoice just came through (new freeholder)

[snow patrol]

Hi all,

I've lived in a flat for about 8 years. Was paying about 150 a year for my share of buildings insurance. Late last year the freehold changed hands. I've just had an invoice through for about a grand (which is a fifth of the total insurance, as there's three flats and two retail floors). This has come as a massive shock and I've had zero contact with the freeholder over this (even the invoice is from the insurance company, as opposed to the freeholder).

Do I have any 'rights' or recourse in this matter? It seems like they've gone for all the bells and whistles with the insurance (including 'terrorism insurance, wtf!). There's also something under sums an limits which references 36 months of potential loss of rent at £210,000, which doesn't apply to me at all and is just for the retail floors and the one flat owned by the freeholder presumably. If that protection ads to the cost of the premium, which i would assume it does, then am i really expected to pay a slice for it?

 

[Maccapacca]

Insurance is rapidly rising and companies are becoming more aware of such things as terrorism cover. After Grenfell insurance on apartments is also going north.

You should not be paying for the rental insurance though unless it's somehow linked to the upkeep i.e. you have no ground rent because the profit on the rent of the commercial goes towards the building upkeep.

Are you also paying ground rent?

 

[snow patrol]

Insurance is rapidly rising and companies are becoming more aware of such things as terrorism cover. After Grenfell insurance on apartments is also going north.

You should not be paying for the rental insurance though unless it's somehow linked to the upkeep i.e. you have no ground rent because the profit on the rent of the commercial goes towards the building upkeep.

Are you also paying ground rent?

thanks. So far there has not been a ground rent or service charge bill come through, but the new freeholders have only been in for about 5 months.

 

[Quartz]

Huh? Up here in Scotland I pay my own buildings insurance.

Tell them to **** O** and detail your own liability and insure for that.

 

[snow patrol]

for reference, flat is worth about 400k..and my invoice is for £985 for a year...i've asked several friends who are paying vastly less for buildings insurance for their properties ..

 

[builder22]

I pay £40 a month 'service charge' which includes building insurance, then there's always a bit more at the end of every year for various repairs etc 100k flat in scotland

I think when i was looking to buy, one of the drawbacks of flats above shops was the insurance - can't remember exacty but there was something!

 

[HungryHippos]

for reference, flat is worth about 400k..and my invoice is for £985 for a year...i've asked several friends who are paying vastly less for buildings insurance for their properties ..

Does seem a bit overkill, sounds like they are lumping you in with the commercial insurance side of things though.

I pay £120 a year or so for home & contents insurance for my entire 3 bed house.

 

[Maccapacca]

Anything comparing Scotland is irrelevant.

 

[snow patrol]

Does seem a bit overkill, sounds like they are lumping you in with the commercial insurance side of things though.

I pay £120 a year or so for home & contents insurance for my entire 3 bed house.

but presumably it's the case that i just have to accept it, given that i live above it ?

 

[HungryHippos]

but presumably it's the case that i just have to accept it, given that i live above it ?

No harm in fighting it. I would.

If there are 5 tenants of the building, that means the entire cost of the insurance is £5k~ ish a year. I get that London has a higher risk of terrorism than my house would, but even so...

Anything in your lease that stipulates how much you should be paying as a percentage of the insurance costs?

Has the freeholder looked around at more than one quote here? it's a big increase on your previous 8 years so must have a reason for it. Did you retain any info on your previous years insurance specifics (costs and policy schedules?)

 

[snow patrol]

No harm in fighting it. I would.

If there are 5 tenants of the building, that means the entire cost of the insurance is £5k~ ish a year. I get that London has a higher risk of terrorism than my house would, but even so...

Anything in your lease that stipulates how much you should be paying as a percentage of the insurance costs?

Has the freeholder looked around at more than one quote here? it's a big increase on your previous 8 years so must have a reason for it. Did you retain any info on your previous years insurance specifics (costs and policy schedules?)

i've been in touch with the previous freeholder to get info on previous insurance. To confirm, it's 2 leaseholders (1 bed flats) then the free holder owns 1 flat which is on the market and then there's two retail floors at the bottom. 5k seems a massive amount and to be honest getting the invoice through has completely ruined my day, especially as i've had to take a fairly large pay cut recently

that 210,000k insurance for potential loss of 3 years rental income surely drives up the price but has nothing to do with me...do you think i can argue with them that paying an even 5th seems very unfair.

 

[HungryHippos]

That kind of thing should be specified in your leasehold agreements, as a commercial property will certainly be more likely to need to use the insurance than you would as a home owner.

And yes certainly loss of earnings from the commercial properties should not really be paid by you, after all what interest is it of yours?

I don't think you can get your own insurance policy as you don't own the building.

 

[~Divine~Wind~]

Do you own the flat?
If not then all you need is contents insurance surely.

If there's essentially 5 properties, 3 flats and 2 businesses then like ***** would I be paying a fifth.
The 2 retail floors will likely need vastly higher insurance cover than you and they should most certainly be paying more.
I'll be interested in how this pans out mate, good luck getting it sorted

I think I pay just shy of 300 for a year for building and contents, including accidental and away from home cover for valuables including all tech and a couple of bikes.

 

[a1ex2001]

Seek legal advice as i’d Be expecting them to rob you left right and centre if they think that is a fare practice!

 

[SeatIbiza]

All of the above advice is nonsense.

You have to pay what your lease says you have to pay which may include loss of rent but you need to read the lease. Terrorism insurance is coming the norm now and should be a very minimal amount. If there are 5 properties then it will likely be 20% each. However, the premium does seem particularly high; ask for a copy to see what exactly is being covered. For reference, I have just insured a building on the Purley Way which has a car tyre business ground floor (high risk really) and a 3/4 bed flat above over two floors. The premium was £650.89 and that is a £350k rebuild price, includes £36k of alternative accommodation for the resi tenants and IPT. As per the two leases, I split this 50/50 between the tenants.

A lot of people are buying freeholds of properties purely to profiteer from them. Several of these larger and more unscrupulous ones have hit the press. If you're bored: http://www.spanglefish.com/peverelaction/index.asp?pageid=114478

I have two flats with Estates & MAnagement Ltd which are what Solataire used to be...total and utter bar stewards.

 

[a1ex2001]

The leasehold market has gone bonkers and as said is full of rank profiteering sadly the current government has no interest in changing things!