what must building insurance actually cover if organised by RMT's

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    #16
    Originally posted by HBB View Post
    I'm not sure whether my earlier reply to you all was sent as I can't see the post but I wanted to thank you all for helping me with this matter.

    There is a problem with the amount to be insured and what must be insured as some of the members of the RTM wish to reduce premiums (which is understandable to a degree) and want to cut out certain aspects and not insure them e.g. remove common parts and equipment, in the cover and reduce public liability etc as well as remove legal expenses and removal of rubble should everything be burnt down/demolished. I don't want that as if anything happens aren't leaseholders/RTM responsible for costs?

    This all seems complicated and I don't mind paying a bit extra for surety of cover but want to be able to say we have to do this to get a bit of cooperation. It seems dangerous not to get reasonable cover and our leases say that we have to cover rent for 2 years and it says the insurance has to be comprehensive.

    Thanks for any of your further help in advance. Its greatly appreciated.
    The starting point is the terms of the lease as to what that says on insurance and then in turn what the market offers as in older leases with provisions for fire and no mention of, or a general clause, giving rights to insure for other perils. it is then a matter of what is appropriate and achievable and that in turn leads the exact wording of the above and the circumstances.

    e.g. remove common parts and equipment,
    here the risk is that there need to be provided and maintained and if they are uninsured and it is reasonable to say that they should have been then they might be vulnerable to a claim by a leaseholder that failing to insure means that the cost of replacement is not fair and reasonable pushing the RTM to insolvency.

    reduce public liability etc- well the amount involved is low and often cannot be lowered below a few million, and the obligation on the RTM is to insure the company as much as the property under the lease, adequately in order to act in the best interests of the company.

    as well as remove legal expenses again as this is a company decision it has to look at the risk and recoverability of legal costs form its members as service charge may preclude recovery

    and removal of rubble should everything be burnt down/demolished- again that is not for them to decide as they cannot for see in advance the type and extent of loss.


    As said may of these tweaks might be risky and in turn may not even be commercially available from the insurers
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

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      #17
      Originally posted by leaseholdanswers View Post
      I have only returned to this thread today and I don't see any need to carry on this academic debate with 10 years experience of RTM units and litigating them The answer is in the appalling structure behind the drafting of much of this Act.
      But have you ever litigated this precise point?

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