Insurance for mental health or ex convicts, drug users etc?

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    Insurance for mental health or ex convicts, drug users etc?

    Is Freeholder building insurance more expensive or require more cover if there are leaseholders subletting tenants from housing charities who have either mental health issues, ex convicts, homeless people, drug users ect or all of the above?

    I am a freeholder and have to insure a building.
    A leaseholder of 1 of the flats, subleases tenants from a charity that from the look of it, houses people with mental health issues.
    Perhaps they might be ex convicts or homeless people, (drug users?), its hard to tell because they are not very transparent on their web site, they have mental health on there advertising fliers in the local library. So I presume they may all have that condition at least. They will not disclose what mental illness their tenants have. The last one I later found out was a paranoid schizophrenic drug user, known to be violent if medication was not taken, which was likely due to being a recreational drug user, he had to be sectioned a number of times.

    Where do I stand on insuring the building? If the insurance is not a higher premium I would be amazed as these tenants are unbelievable in their behaviour.

    #2
    Is this against the terms of the lease?
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      If it raises the freeholders building insurance cost, then yes, their lease says they cannot do anything that would cause the premiums to be higher.

      The leaseholder is also required to be fully insured for their flat. If their flat insurance is not adequate (ie it doesn't perhaps cover the 'type' of tenants they have, thats if indeed they do need higher insurance) its a a second lease break on insurance.

      I doubt they have even insured their flat as the owner doesn't have a buy to let mortgage. Their mortgage terms don't even allow subletting.

      The leaseholder has broken the lease on multiple counts with other matters, Im just checking if they are breaking it on insurance as well before I head to the solicitors with a list of all the lease breaks.

      Comment


        #4
        If the mortgage doesn't allow letting any insurance they have is likely to be void anyway.
        The organisation renting the property to let it out may find their insurance is similarly invalid if the property is being let against a mortgage lender's terms and conditions.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          Think Freeholder should write (yes, WRITE - keep copy) to leaseholder instructing them to cease & desist, and also inform mortgage company (should find it from leasehold deeds, £3, Land Registry)
          https://www.gov.uk/search-property-i...-land-registry

          Dunno about insurance
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            Thats interesting, insurance will not payout if mortgage is violated, wow they check everything. So 'his' insurance is violated, thats a lease break.

            Would the leaseholder require a landlords insurance, because I think he may of insured as him living there. I am wondering if a special 'landlords insurance' is needed, or a buy to let type of insurance of some kind.

            What about my freeholder building insurance, will my insurer not payout to me because of this leaseholder violating his mortgage and so his insurance?

            Also I cannot inform insurer 'if needed'? Of what mental illness his tenants have as the subletter charity will not tell me about their tenants condition or circumstances. They are a huge risk in terms of there behaviour, latest tenant broke communal door glass 8 times in 15 months. I am not always there or know about the damage to board up the door and secure the building and the charity if they was left to do it could take a fortnight to fix their tenants damage.

            They have made the building un-rentable and un-sellable to other tenants or buyers. If I was an insurer I would consider them too high a risk to the building to insure, I would find it odd if my building insurance would not be effected with a higher grade of insurance.
            The building is at risk from not only the tenants and also those they pick fights with as it creates break ins and vandalism from those they pick fights with.

            Again does that effect insurance costs? If the tenants behaviour causes others to break into the building to fight them or vandalise their flat, to me thats a big risk to an insurer.

            Comment


              #7
              As it's a lease break can you not proceed to forfeit? Might take time & money but that would eliminate your problem
              I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

              Comment


                #8
                Thats what I want to do, he has broken about 5 of the lease agreements. Im just seeing if there is also something with insurance as well. Not sure how seriously a judge takes that, the lease states if you dont pay ground rent, or break any of the lease agreements, I can take the flat back. If a judge goes that far or they just warn the leaseholder, or give them a fine I dont know.

                Another piece of information. The tenant has lodgers, the charity (subletter to the leaseholder) knows about the lodgers, its in their charity housing rules he is not allowed them, but they turn a blind eye. Its a one bedroom flat, he has a couple and another man all living in the flat with him. I informed the welfare office as one of them had a job. One of the lodgers has a criminal record, there is a report in an online newspaper with a court case for setting fire to a public bin.

                Does overcrowding and lodgers effect the lease holders flat insurance? Does it effect my freeholder building insurance?

                Comment


                  #9
                  Overcrowding is something that your local authority would enforce.
                  They can require that the owner remedies the issue if there is overcrowding.

                  Your lease with the leaseholder should contain the steps required if there is any breach of the covenants - failing that the management company may have a formal process.
                  At very least, you should be formally communicating with the leaseholder to highlight your concerns and your possible remedies.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    Environmental health was sent a letter from neighbour about rubbish dumping and rats, vomiting and spitting on his food business roof, amongst other things, EH didnt answer him back. Perhaps the letter didnt get to them, or they are not interested.
                    Housing charity couldnt care less about what there tenants do, they receive HB anyway, 150 rather than the 80-100gbp regular rent for a normal property rate tenant, and split the difference with the leaseholder after their cut. Charity is owned by someone with a title (Lady something or other) - I wonder what her non profit 'wage' is from the tax payers.

                    I think the original post topic may become lost here, does it require a higher premium to insure building that has leaseholders with tenants with mental health issues?

                    Comment


                      #11
                      When you asked several insurance brokers (there are lists on this site..) what did they say?

                      I suspect the issue will be more that those occupants and the breaking of the lease conditions may mean there is no cover for damage caused by these occupants. You really need to speak to your broker.
                      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                      Comment

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