Management company and insurance Q's - Buy to Let

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    Management company and insurance Q's - Buy to Let

    Hi all,

    Just had an offer accepted on my first B2L - a flat in a conversion comprising of 4 flats - and immediately have some questions I wanted to sound out, before I start paying out for solicitors etc.

    The seller has told me there is no management company, which raises two concerns with me:

    - How are works/repairs agreed/payed for/what if one party refuses to pay etc - I have asked this question and waiting for a response...
    - How is buildings insurance arranged if there is no management company, hence no management fee? The response to this was 'Each flat has their own building insurance and with the last buyer we had agreed on an indemnity policy to provide further cover incase of other polices not being up to standard or lapsing.'

    Firstly, does the above re: the indemnity policy sound like a usual way to do things if a building does not have overall buildings insurance? It concerns me as I have never heard or this, but perhaps it's not unusual?

    Secondly, is it usual for there to be no management company in place, and, pending his response to queries about works/repairs, what other issues may this cause?

    Thanks!

    #2
    There will always be a freeholder who was the named Lessor when the leases of each flat were created.
    There will not always be a management company if the freeholder retains control of his own property.

    I would have thought that knowing who the owner is can be ascertained from the register of title for the freehold estate unless the freehold estate remains unregistered.

    A register of title for the freehold, if it is registered, can be purchased for £3 using the Land Registry web-site to search for the address of the property.
    There could be a total of four titles, with one freehold title and four leasehold titles having separate title numbers.

    Comment


      #3
      Thanks for coming back on this. I have been trying to download the freeholder info from the land registry for a few days without success, but will get this as soon as I'm able to.

      I'm a little unclear as to how this would relate to point 2 in my original post - if a ground floor flat fire destroyed my flat, and they had no insurance, how could I guarantee I wouldn't be left high and dry? There is no service charge, so no fund in place for buildings insurance. Thanks

      Comment


        #4
        Often there will be no management company and the freeholder or lessees will manage building, but you need one policy to cover the whole buildings.

        Individual (buildings) cover for each flat is a disaster waiting to not be covered!
        What does the lease say about it all ?

        Comment


          #5
          Originally posted by Section20z View Post
          Often there will be no management company and the freeholder or lessees will manage building, but you need one policy to cover the whole buildings.

          Individual (buildings) cover for each flat is a disaster waiting to not be covered!
          What does the lease say about it all ?
          Thanks - this is very much how I feel! I've yet to see the lease (I am chasing), but have been told the following;

          "The lease does not have fixed guidelines on communal works, just clauses to say that all of the property owners will share the costs of any major works equally. Where work has been performed we have been able to get agreement from all parties and just split the cost without any issues. The lease is clear that everyone has to pay equally.

          There is no sinking fund in place that I am aware of. The solicitors organised the imdemity policies between them last time (referring to the previous sale, which fell though), I know that it covered items such as lack of insurance for both the landlord and the other tenants"

          So there's the suggestion that the indemnity policy will cover the fact that there is no single buildings insurance, but not knowing a huge amount about buildings insurance, especially in this situation, I don't feel confident about this.

          Comment

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