understanding the insurance covenant

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    understanding the insurance covenant

    Hi All, just confirming my understanding of the insurance covenant:

    That the Tenant will at all times during the said term (unless such insurance shall be vitiated by any act or default of the owner lessee or occupier of any other maisonette comprised in the building insure and keep insured in the joint names of the Landlord and Tenant in full reinstatement value thereof (and any increase to cover that may be required by the Tenant's Mortgagees from time to time) the demised premises against loss or damade by fire Architect and Surveyours fees and such other risks (if any) as the Landlord may reasonably require in some insurance office of repute and whenever required to produce to the Landlord the policy or policies of such insurance and the receipt for the last premium for the same and will in the event of the demised premises being damaged or destroyed by fire or any other insured risks as soon as reasonably practicable lay out the insurance monies subject as aforesaid and will permit the intrest of any mortgage to be noted in such insurance policy

    1)So the LH to insure the property in the joint names of the LH and FH
    2) LH to provide the freeholder with the policy and policy receipt when required
    3) Architect and Surveyours fees and such other risks (if any) as the Landlord may reasonably require in some insurance office of repute - what does this mean? Can
    FH get the surveyor to assess the fire safety and get the monies from the LHs?

    Thanks

    #2
    1. The tenant will insure and keep insured in the joint names of LL and Tenant to full reinstatement value the "demised premises" against loss or damage by fire, the architects and surveyors fees and such other risks as the LL may require.

    This means the calculation of "reinstatement value" must include "cost of rebuilding" , "cost of architects services for obtaining planning consent " and "surveyor fees for evaluation of quotations" and site visit inspection etc."

    Other risks may be insured including "public liability" ," employee liability" , and "damage caused by water leakage"

    2. When required, to produce to Landlord the policy of such insurance and receipt for last premium.

    3. In the event of the demised premises being damaged by fire, pay out the insurence monies .

    4. the insurance policy to permit the interest of the mortgage to be noted.

    Comment


      #3
      Reinstatement value is the total cost to rebuild assuming that you are starting with a muddy field. Your freeholder may well be able to give you a guide as to the correct reinstatement value. It is sometimes more than market value, sometime less.

      Comment


        #4
        Originally posted by Anna1985 View Post
        Can FH get the surveyor to assess the fire safety and get the monies from the LHs?
        Nothing in the clauses you quote says he can. There may though be some other provision in the lease which allows a charge. Have a look at what can be included in the service charge and to see if there is a general clause relating to fees.

        Comment


          #5
          Thank you all, there are no service charges as such, but responsibility to pay for share of maintenance and repairs to the property.
          however there is a requirement on freeholder to carry out the checks re fire safety

          The only other clause that could cover it is:

          To pay all existing and future rates taxes duties charges assesments and outgoings whether parliamentary parchochial or otherwise now or hereafter imposed assessed or charges upon demised premises or any thereof or in the Landlord Tenants or occupier in respect thereof respectively (except the Landlords property tax in respect of the part hereby demised)

          Comment


            #6
            That does not cover it. If they want to charge for it ask where it says they can in the lease.

            Comment


              #7
              Thank you, trouble is that it is freeholder responsibility to assess fire safety, and the lease doesn't seem to provide any option to recoup the cost of qualified opinion.

              Comment


                #8
                Fire safety assessment is treated as a service charge expense

                Comment


                  #9
                  Gordon999, the trouble Is there are no services charges, just shared property maintenance and repairs divided in equal parts between leaseholders

                  Comment

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