Landlords breach of lease

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    Landlords breach of lease

    Hi we own a lock up shop on 999 yr lease in a mixed use block 6 flats & 2 Shops. Our lease state we have the right to be named on the building insurance policy as an interested party. It also state we have the right to see the schedule and premium paid. We have been requesting the latter for a number of years to no avail, and this year we have remortgaged and have been asked by our bank for proof of building insurance cover. We have requested this but the landlord has refused because we have a dispute. We have asked our solicitor to write to them but it looks like we are going to have to take this further. Does anyone have any idea of cost of getting an order fo the landlord to supply and integrate what it says in the lease. It looks like we can’t remortgage without the insurance policy so this is our only option. Thanks to anyone that has this type of experience.

    #2
    I suggest you and/or your solicitor read: Green v 180 Archway Road Management Co Ltd [2012]

    From my law library: "The case involved a ground floor shop with three flats above The landlord was required to insure the building in the joint names of the landlord and the tenants Each tenant paid one quarter of the cost of the building insurance premium. Originally the certificate of insurance showed the landlord as the insured, included a general interest clause and noted specific interests. For the last three years no specific mention was made of one of the tenants, Ms Green. She claimed she was not liable to pay towards the premiums as the landlord had not complied with his covenant to take out the policy in joint names.

    The Upper Tribunal (Lands Chamber) held that in order to be entitled to recover payment from Ms Green, the landlord had to show that it had placed insurance in accordance with the relevant clause in the lease. The Tribunal appears to have accepted that noting of special interests was sufficient to satisfy any lease with joint insurance obligations (although many may argue this point).

    Placing insurance in the name of the landlord with no mention of the tenant’s name and relying on a general interest clause was not, however, sufficient. Ms Green was therefore only liable to pay for those years when her interest had been directly named on the insurance policy.

    This case reminds us that in order to be able to enforce payment of insurance rent from their tenants, landlords must follow insurance covenants to the letter"

    I've no idea of the cost you might incur but it might be worth suggesting to the landlord that if he doesn't provide the requisite documentation as stated in the lease then you would have no obligation to pay the premium.


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    Comment


      #3
      Thank you rentreviewspecialst,

      We will send this case to our solicitor to look into. We note the lease clause in the case mentioned states “4(ii) of the lease required the landlord to “insure and keep insured with a reputable insurance company in the joint names of the lessor and the lessee each and every part of the Building…”

      Our lease clause states
      “4(1) subject to the tenant making payment in accordance with the provisions of clause 4.2 Of this lease the landlord will insure the building and all landlords fixtures and fittings of insurable nature (subject to availability of cover and to such access exclusions and limitations or conditions as the landlord or the insurers may require) in such reputable insurance office or with such underwriters and through such agencies as the landlord may from time to time decide in such amount as the landlord shall reasonably determine (including architects and surveyors and other professional fees and incidental or consequential expenses) against loss or damage by fire (and such other risks as a prudent commercial landlord would normally insure) and any other perils as The landlord may properly require including terrorism and subsidence cover and will cause the tenants and all its mortgagees interest to be endorsed on the policy“

      4(3) at the reasonable request of the tenant the landlord will produce evidence of such insurance and of the payment of the last premium together with a copy of the policy and up-to-date schedule thereof.

      We have been requesting to be named on the policy since 2016.
      Do you think this would be the same grounds as mentioned in the case above ?

      Thanks in anticipation

      Comment


        #4
        Generally, case law provides a principle. Your solicitor should advise but in my view ensuring the tenant's interest us noted on the policy is enforceable.

        Comment


          #5
          Thanks again, I have requested my solicitor looks into it.

          Comment


            #6
            rentreviewspecialist,

            I am currently preparing a case for the First Tier Tribunal and have come across a similar problem - this time in a residential context. The issue in this case is that the lease explicitly states that the Landlord is obliged to obtain terrorism cover and also cover for 3 years loss of rent. The insurance policies that have been placed by the Landlord going back a number of years contained neither terrorism cover nor 3 years loss of rent cover. I was planning to use the UT case above to argue that the cost of the insurance policy is not recoverable from the leaseholders. Do you think that this will work, given the fact that the above UT case is premised on another failing altogether? Or is there another (and more appropriate case) that I should be citing instead of the UT case above?

            Comment


              #7
              As I rarely get involved with the thorny issue of insurance my limited knowledge/experience doesn't enable me to speculate. Seemingly no other cases were cited in the Archway case, but there is a reference to Woodfall at section 11.093.I suggest you search on-line (search terms, eg, Archway, insurance in leases, UK) for any articles by solicitors and barristers in the. hope of finding more detailed commentary.

              Comment


                #8
                Originally posted by desamax View Post
                Our lease clause states
                “4(1) ... and will cause the tenants and all its mortgagees interest to be endorsed on the policy“

                ...

                We have been requesting to be named on the policy since 2016.
                Do you think this would be the same grounds as mentioned in the case above ?
                Unfortunately I do not think that the terms of your lease require that you are named on the insurance policy.

                Most 'block insurance' policies (including the one in the Green v 180 Archway Road case) include a clause that says something along the lines of "the interests of leaseholders/mortgagees are noted".
                What this means is that the policy recognises that there are people who have a financial interest in the property despite the fact that they are not named.

                In the Green V 180 Archway Road case, the cost of the cost of the insurance was ruled unrecoverable because the lease was deemed to only allow the recovery of insurance that was in accordance with what the lease stated needed to be purchased.
                This would mean that you may have no right to insist that you are named on the insurance (as long as the policy includes a mention of "noted interests").

                Your solicitor will obviously be able to advise you, but I wouldn't be surprised if you don't have a valid claim - although that shouldn't stop the freeholder/managing agent from providing you with a copy of the policy (they have nothing to gain from withholding that).

                Comment


                  #9
                  Originally posted by Lorimer View Post
                  I am currently preparing a case for the First Tier Tribunal and have come across a similar problem - this time in a residential context. The issue in this case is that the lease explicitly states that the Landlord is obliged to obtain terrorism cover and also cover for 3 years loss of rent. The insurance policies that have been placed by the Landlord going back a number of years contained neither terrorism cover nor 3 years loss of rent cover. I was planning to use the UT case above to argue that the cost of the insurance policy is not recoverable from the leaseholders. Do you think that this will work, given the fact that the above UT case is premised on another failing altogether? Or is there another (and more appropriate case) that I should be citing instead of the UT case above?
                  The Green v 180 Archway Road case reached the conclusion that the insurance costs were not payable in that case not because there was a likelihood that the building wasn't properly insured (it probably was insured against all likely risks) but because the insurance hadn't been arranged in accordance with the contractual requirements in the lease. This would suggest that it is likely that you would have a good argument for using the case as precedence in your tribunal - although this does depend on the precise wording of the relevant clauses in your lease and the details of the policy that applies to your building.

                  Comment

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