How can we get our block insured in this situation?

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    How can we get our block insured in this situation?

    I`m posting this on behalf of a friend. Could anyone advise? Thank you

    "How's this for a dilema. Our Freeholder/Managing Agent arranges the buildings insurance, and the premium is paid by all the leaseholders paying their share. We duly pay our service charges which included the insurance money only to find out that the insurance poilicy has been cancelled. We have ascertained that the Freeholder/Managing Agent has not yet be able to arrange further insurance cover because the potential new insurer requires a letter from the previous insurer explaining why the policy was cancelled. We know the Freeholder/Managing agent has received that letter but seems reluctant to share it with the new insurer, one has to wonder why there is this reluctance, Having spoken to the original insurers to see if we leaseholders can get together the insurance premium they would consider re-insuring the building. Apparently that is not possible because we do not own the building. This is a building with circa 100 apartments that is now not insured and there seems to be nothing we can do about it. I have spoken to Trading Standards, Local Authority, Various ombusman services, etc. It would appear this is probably a new phenomena so no precident to base any action on."

    #2
    Sounds like someone has been caught cooking the books. Maybe you could buy the freehold at a knock down price, in view of freeholder having made himself an outlaw?

    Comment


      #3
      Surely there is a breach of covenant by the FH, do they not have the covenant in the lease to insure the building and recoup the amount plus commision from the leaseholders? Someone more in the know could spell out what the FH obligations are regarding this, and what consequences if they fail in their duty towards leaseholders.

      Comment


        #4
        Thanks JK0. More than likely! But any idea how this can be resolved. I thought maybe the mortgage company could put some insurance in place?

        Comment


          #5
          Michelle 230,

          You should get your local MP to report this situation to both James Brokenshire Secretary of State and Heather Wheeler , Housing Minister and get the freehold company disqualified from owning the freehold for suspected abuse on demanding insurance commission, and not an entitlement under the lease and not a registered insurance broker .

          Also make a complaint to FCA ( Financial Conduct Authority ) which regulates the insurance companies and brokers and ask FCA to investigate your situation.

          Comment


            #6
            Thanks Desamax and Gordon. Someone suggested my friend (and the other owners) check if there is a mortgage on the building and if so to speak to the mortgage company.

            Comment


              #7
              You can pay £3 to download the freehold title ( for your post code address ) from Land Registry Online and check if any mortgage lender or bank has registered a charge over the freehold title. But I think you must make a formal complaint to FCA and Housing Minister..

              As a leaseholder , you are a long term rental tenant and you have no power against the freeholder or his mortgage lender .

              Comment


                #8
                Whilst the leaseholders collectively may not be able to insure the building, each leaseholder can insure his own flat. Your friend is recommended to take out insurance without delay.

                I would be surprised if the leases do not require the landlord to insure. Assuming they do, if there is an incident the landlord is going to be responsible for making good at his own expense. If the agents are at fault in some way they could be liable. The agents should not be pussyfooting around, but treating the matter is one of the utmost urgency.

                Someone needs to be insisting that the leaseholders are told why the insurance has been cancelled.

                Comment


                  #9
                  It is the responsibility of the freeholder to insure the block according to the lease. But there seems to have been some dubious dealings on his part hence cancellation of current policy. He is unresponsive to any attempts at communication from leaseholders.

                  Comment


                    #10
                    Lawcruncher - someone as in who? No-one seems to have the authority to access the information other than the freeholder and he is not playing ball!

                    Comment


                      #11
                      Your friend should set up a RMC ( Residents Management Company) which must be accepted by the freeholder

                      or set up RTM ( Right To Manage Company ) which requires 50%+ support by leaseholders :

                      - and appoint another managing agent to do the service charge administration for the block of flats.

                      Comment


                        #12
                        An RMC requires that the lease be a three party lease. Otherwise it would just have the status of a managing agent.

                        Comment


                          #13
                          Originally posted by michelle230 View Post
                          Lawcruncher - someone as in who? No-one seems to have the authority to access the information other than the freeholder and he is not playing ball!
                          Where a leasholder pays a service charge which includes insurance he has the right to ask for details of the insurance and failure to provide the details is a criminal offence. Accordingly your friend sends the landlord a notice in the form below and waits to see what happens.

                          *

                          To [insert name of landlord]

                          [Address of property]

                          Section 30A of and the Schedule to the Landlord and Tenant Act 1985

                          You are required within 21 days from the receipt of this notice to supply me with either a copy of the insurance policy relating to the above property or a written summary of the policy including the insured amount, the name of the insurer and the risks covered under the policy.

                          You are respectfully reminded that it is an offence to fail, without reasonable excuse, to comply with the above request.

                          Date.........................2019

                          Signed.............................

                          [Leaseholder's signature]

                          Comment


                            #14
                            Originally posted by leaseholder64 View Post
                            An RMC requires that the lease be a three party lease. Otherwise it would just have the status of a managing agent.
                            ? Once the right to manage is granted management functions are trnasferred to the RTM co.

                            Comment


                              #15
                              Originally posted by Lawcruncher View Post

                              ? Once the right to manage is granted management functions are trnasferred to the RTM co.
                              An RMC is not an RTM. The responder was proposing either a forced RTM, or a voluntary RMC. The forced RTM would still work.

                              Comment

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