How to pay for insurance?

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    How to pay for insurance?

    I am a freeholder of a converted house. I am selling my flat and retaining half the freehold and i am also sorting out the insurance for the building. The renewal is next week but the new owners do not move in until the end of the month.

    If I pay for the insurance upfront for the year and claim one third from the downstairs flat, can I then claim the other two thirds from the new owner/freeholder when they move in?

    Thanks

    #2
    How many flats are there ? -- 3 ?
    Each flat in that case pays one third. ( or one quarter - if 4 flats etc.)
    Leaseholders re imburse the freeholder, so why was the money not collected previously.
    You set the expences 1 year in advance for all out goings, and that includes the insurance.
    Why are you not doing that - but does not matter, because you just did not.

    One flat does not pay two thirds of the insurance.

    You tell the buyers that insurance is due this month for 1 years buildings insurance, and one third is £ x

    But as you have not collected money in anticipation of insuring, you pay it ( freeholder pays ) and next month you state to new owners-- We paid the insurance last month, in June, and your share is £ x

    You could reduce their payment by 9/365, if they cry. But with them paying they will get 50 weeks insurance instead of 52. -- I don't see the problem.

    Me - i would not bother.. Just invoice for the insurance in July, stating insurance was due, we paid it in June and now you have buildingss insurance.

    Comment


      #3
      Many thanks. there are two flats but one is a one bed basement and the other is a two bedroom over two floors and in the original lease for the basement, it states that the basement pays one third and the upstairs pays two thirds.

      Until now, we as the freeholder and owner of the top floor flat, we paid the insurance and then collected the one third from the basement and paid the other two thirds ourselves.

      However, as we are now selling our flat and having to split the freehold, I didn't know what to do. I have not included a service charge on the property, just to collect the ground rent and insurance.

      It sounds like a plan to just tell them from the 1st July they will have to pay £x amount.

      Comment


        #4
        Simple, you wont own the flat on the1st July, therefore you must get from the new owner pre payment for the cost of insurance. all this should have been known and accounted for ages ago.
        And why when you have sold are you keeping half the freehold. Your frreehold portion should be assigned ( for free ) to the incomming owner.

        2 lessees own the freehold, and not some dude that does not live there, but be equal between the 2 leaseholders.
        You cant have half the freehold. You can have a 50% share in the company that owns the freehold. - but i cant read your lease from here. But betwen the 2 owners.

        Also, if 2 flats, then both should pay 50% of the insurance. as if your part burns down, and basement unscathed, the basement is no good with out the building on top of it.
        The insurance covers things like drains ( up to a point ) accidents to visitors ( and basement may have more visitors than you.)
        Falling trees on next door cars, falling trees on your cars, but you may have less cars than the basement.
        There would be a chiminy from basement up through your part of the building ?
        Your building keeps the rain off the basement, as the basement has no roof. Remove your building, and basement is open to the elements. therefore basement pays 50 % of the insurance.

        you split the feehold, and you will be suppliing a lese for your flat, as you may not have.

        anyway -- it sounds a mess.

        Goog luck.

        Comment


          #5
          It is a bloody mess! I am keeping a share of the freehold because, as you say my share is being transferred to the new owners. However, as I have the entire freehold and the leasee in the basement doesn't want to purchase a share of the freehold or extend. therefore, I will still have a share.

          The lease states that the basement pays a third and upstairs pays two thirds.

          Comment


            #6
            You may be able to claim back the the upstairs flat contribution to annual insurance ( paid in advance by you ) through the sale completion statement . But you should discuss with your conveyancing soicitor first.

            Comment

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