Shared ownership house insurance

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    Shared ownership house insurance

    Hello

    I'm looking into an issue for someone who lives in a shared ownership house. His lease requires him to pay for a buildings insurance policy provided by the landlord. It appears the landlord (the housing association) has purchased a block policy, covering all of their properties within many miles of the house in question. The cost of insurance has doubled in one year, to over £400 for a modest two bedroom property.

    This seems a particularly lazy and unfair policy, where leaseholders are subsidising excessive claims or perhaps flooding/subsidence/etc elsewhere.

    I assume this is a legal approach to providing buildings insurance but is there any up to date advice on this topic, for example, compelling the landlord to seek the lowest cost? Or perhaps the ability for a leaseholder to provide their own insurance to the satisfaction of the landlord?

    Thank you.

    #2
    This looks very relevant! https://www.legislation.gov.uk/ukpga...15/section/164

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      #3
      The key question I'm asking is whether this piece of legislation can be used under shared ownership.

      Comment


        #4
        Read the free guide to leasehold house insurance at www.lease-advice.org -

        https://www.lease-advice.org/faq/i-a...y-own-insurer/

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          #5
          Originally posted by Gordon999 View Post
          Read the free guide to leasehold house insurance at www.lease-advice.org -
          Thanks. I've read this and it deals with the use-case where the leaseholder is required to arrange insurance. My use-case is where the landlord sets up the insurance and leaseholder required to pay, however inefficient the landlord process may be.

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            #6
            You should read the lease and see if the wording in relevant clause on insurance allows the tenant to arrange insurance.

            Send an enquiry to the legal advisor at www.lease-advice.org.

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              #7
              The Landlord passes on the entire buildings insurance cost to shared ownership leaseholders, and charges them rent.

              The lease defines the "Specified Insurance Proportion" as follows: such fair and proper proportion determined by the Landlord.

              This suggests the Landlord can deem the proportion (of the insurance cost) as 100%, but that does not seem "fair". Is there any case law to determine what is a fair proportion in a situation where a leaseholder only owns 25% of the property?

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                #8
                It is quite normal, under shared ownership, to pass all service charges to the bottom level leaseholder. If that didn't happen, the rent would need to be increased and inflation proofed, to compensate. Insurance is a service charge.

                I imagine the fair and proper reference comes from cutting and pasting text intended to cover blocks of flats, where the insurance cost is split amongst the flats.

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                  #9
                  I can see that point of view, but I can also see a different one. If one only owns a share, and pays rent on the remaining share, why isn't the Landlord responsible for paying to insure their share as a private landlord does when a tenant pays rent?

                  The primary concern however is the cost of the policy. The Landlord has purchased a multi-million pound policy with a £50 excess, which is clearly being abused as the cost has doubled from £210 to £420 in 12 months (for a small, two bed terrace home). Comparable house insurance is available for £79 at a range of quality providers. Clearly, tenants are being ripped off.

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