lanaby Posted December 7, 2013 Report Share Posted December 7, 2013 Hi all; am hoping someone might be able to give me some advice/pointers for a recent unexpected problem. I own a first floor flat which I rent out. The flat downstairs is privately owned. We share the freehold. The two flats are in an old converted police station. There is a house next door with separate freehold. My downstairs neighbour is selling and the new buyer's solicitor says the lease requires us to have combined buildings insurance for the two flats. They want that sorted before they move in. Although the names on the lease on the upstairs flat have changed several times over the years, no solicitor has ever said we needed combined buildings insurance for the two flats; as a result, for the last 13 years we've had separate buildings insurance. Mine is for landlord cover. I am reluctant to share insurance with someone else and am anticipating problems. What if they want to claim and I don't? Do I need their permission to make a claim? what if we need to claim but they refuse to pay the excess etc etc If the lease requires it, does anyone know how I go about changing the lease? I intend to get some legal advice but was hoping someone might have encountered something like this before and can help me. many thanks lanaby Link to comment Share on other sites More sharing options...
Grampa Posted December 7, 2013 Report Share Posted December 7, 2013 Normally with flats weather 2 or 50 the building insurance is done as one policy. If it was me I would be a little concerned that the other flat owner may or may not have a policy in place or enough cover. If he wasn't covered that could effect you if there was a major claim. I bet one combined policy will be a lot cheaper. You could get a new combined policy with a undertaking from the solicitor that their half will be paid which covers this year then introduce yourself to the new owner and clarify an arrangement for future payments and works. You could even built up a small service charge fund to maintain the grounds and pay the insurance as and when due. Link to comment Share on other sites More sharing options...
lanaby Posted December 7, 2013 Author Report Share Posted December 7, 2013 Thanks Grampa. Do you know if it's possible to have a policy that covers their normal domestic purposes as well as mine for landlords cover? Have you even known of a situation where such agreements like you suggest cant be reached? I guess I'm a bit of a cynic ... Link to comment Share on other sites More sharing options...
Chestnut Posted December 7, 2013 Report Share Posted December 7, 2013 Yes! It is possible to have group buildings policy (not inc. contents*) that embraces both owner-occupiers and landlords. And it may even be a condition of ownership. Such a policy may have various restrictions for landlords e.g. type of tenant (DSS, students, holiday use, etc?), and specific referencing in place etc. - insurers are anticipating Gov proposed legislation to check for illegal immigrants. As a landlord you may already be aware of this. *Contents insurance normally separate because tenants need to be responsible for their own belongings. As a co-owner of freehold you should do your own check of lease conditions that the new buyers' solicitor may have unearthed. I concur with Grampa's comments. Link to comment Share on other sites More sharing options...
Grampa Posted December 7, 2013 Report Share Posted December 7, 2013 Have you even known of a situation where such agreements like you suggest cant be reached? I guess I'm a bit of a cynic ... The majority of leasehold property owners don't have a share of the freehold and is it owned by a third party who may then instruct a management company to collect ground rents, arrange insurance, annual accounts, service charges etc. Then you also get leaseholders who also own a share of the freehold and they may have formed a limited company which owns the freehold and have nominated directors and they either manage the block themselves consulting the owners as they go or they instruct a management company. It is cheaper to do it yourself but you need to be aware of the legal obligations. The most common problem to arise doing it yourself is when one leaseholder cant or wont pay their share. That's why when there is only two units in the block such as yours it is important to get along with the other owners. I would think very carefully about buying one of these type of properties for this reason. If there was say 6 or more in the block it is easier to deal with any issues that arise. Link to comment Share on other sites More sharing options...
lanaby Posted December 7, 2013 Author Report Share Posted December 7, 2013 Thanks for the thoughts on these matters. Unfortunately I'm already in this situation now so can only either try and change the lease or draw up some sort of contract with the new buyers to make sure our responsibilities are clear. Given that they probably dont want to delay the sale I'm hoping they'll engage. Will still consult a solicitor I think.... Lanaby Link to comment Share on other sites More sharing options...
Richlist Posted December 8, 2013 Report Share Posted December 8, 2013 The only time tenants would receive compensation from me is if it could be prooven that I had been negligent. Burst pipes aren't usually considered to be caused through negligence. Link to comment Share on other sites More sharing options...
Mortitia Posted December 9, 2013 Report Share Posted December 9, 2013 Burst pipes - if properly insulated pipes should not 'burst' therefore no insulation = negligence in my book. Lanaby - you need to enter into an agreement with the other 'freeholder' to gain joint buildings insurance on the property that you both pay for equally - this a an everyday leasehold matter and should have been sorted out years ago. You need to bring this to the attention of the current 'other half' - taking legal advice will only cost you £££s and end with the same result. If you don't have buildings insurance then you both could have a 'total loss' if say, fire were to break out and destroy the building. You would just be left with the site - I actually know someone who experienced that event. Quickest thing is to ring a broker and get some quotes - try Direct Line or any broker. Mine is with Highhouse Insurance - google it and does come with some contents insurance attached to the same policy. Link to comment Share on other sites More sharing options...
Richlist Posted December 9, 2013 Report Share Posted December 9, 2013 Burst pipes - if properly insulated pipes should not 'burst' therefore no insulation = negligence in my book. Sorry, I posted my reply in the wrong thread. It was after 2.30 am when I posted so thats the feeble excuse I'm going to use. Water pipes are often hidden in /behind walls/ cielings especially in garages so lack of insulation is not always negligence. Link to comment Share on other sites More sharing options...
lanaby Posted December 30, 2013 Author Report Share Posted December 30, 2013 Hi Mortitia, I only just picked up your post so thanks for that. I've been trying to find a policy that covers one house (my home and adjoined to the flats) and the two flats, one of which needs landlord cover. I have had no joy so far, even with the specialist providers. Will try Highhouse but any more suggestions? my main concern is that the other party could make a claim on their property, and in future I would have to declare that claim on my future applications for policies, thus raising my premiums. That seems grossly unfair. Has anyone experienced this before? Of course, the other thing is to try to vary the lease to separate out the need for joint buildings cover. Is that possible given the house and two flats are within one building? many thanks lanaby Link to comment Share on other sites More sharing options...
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