Disputes with present freeholder

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    Many thanks Macromia, it's helpful, very appreciate. Life was in peace until the change of freehold. Feeling like stones smashed on my head, cost both money and time..

    It's a small block (four flats), I am the only leaseholder owns a one-bedroom flat and the other three flats owned by the freeholder (former leaseholder). I have no comrade and the freeholder takes me as an advantage to pay for his use. I am stuck.

    Here are the details of paying building insurance from the lease:

    The Lessee's Covenants: To keep the Demised Premises insured at all times throughout the term of this Lease in the joint names of the Lessors and the Lessee from loss or damage by fire flood and such other risks and special perils normally insured under a comprehensive insurance policy on property of the same nature as the Demised Premises in the offices of the Municipal Mutual Insurance Company Limited or some other office approved by the Lessors in the sum equal to the full insurable value thereof from time to time.

    The Lessor's Covenants: To insure and keep insured the Reserved Property (unless any such insurance shall be vitiated by any act omission or default by the Lessee or the lessee or occupier of any Flat/Maisonette) against loss or damage by fire tempest flood and such other risks and for such sums as the Lessors may from time to time

    It said clearly, my liability to pay insurance to the freeholder is limited to the Reserved Property (common area), not a contribution to the whole building. I understand that a single insurance policy is easier, but because of the size of my flat (the Demised Premises) and the size of the whole building, the cost of insuring my flat is much cheaper than one-fourth of contribution to the whole building. Most importantly, in order to obtain a mortgage, paying insurance for my flat under my name is a condition. I don't know why the present freeholder can consider that he has the power to change this? How am I going to explain this to a future buyer?

    I have to say I was surprised that there wasn't a law to protect leaseholders. Leaseholders have to suffer the cost to Tribunal or legal advice, just to correct freeholder's mistakes. A bad landlord will get all benefits If people have to put up their right because of money. I think this is truly unfair and sad.


      That arrangement, in itself, might cause problems in selling, even if operated correctly. The problem with it is that the owners of the other flats (presumably the one person in this case) are dependent on your actually taking out adequate insurance. It also means you are likely to have more than one insurer involved in any major building claim.

      It would probably be better to get the lease changed to the more conventional arrangement (and the one the freeholder seems to be trying to operate), where the freeholder is responsible for the building insurance, and recovers the costs from the leaseholders. However, there will be costs involved in having it changed.


        Originally posted by hexu View Post
        It said clearly, my liability to pay insurance to the freeholder is limited to the Reserved Property (common area), not a contribution to the whole building.
        This is correct, but it does depend on what parts of the property are demised, what parts are reserved, and precisely what is covered by the 'whole building' policy.
        For example, it is common for the property demised to flats to exclude any structural parts of the building and the external parts of walls. If this is the case in your block, then a policy that covers the whole building might be necessary to properly cover "the reserved parts".

        As leaseholder64 has suggested, this arrangement is messy, and should really be changed. With a patchwork policy of this sort in place, there might be problems getting the insurance companies to pay out if there was a situation that resulted in severe damage to the entire block (and that assumes that all policies that the lease requires are in place).

        Have you asked for a copy of the policy that you are being asked to contribute to, so that you can see exactly what it covers?

        Also, have you insured your demised property in the manner stated (in joint names of yourself and the freeholder) and has a copy of the policy been provided to the freeholder?
        The clause that you quote doesn't seem to require that you provide the freeholder with a copy of the policy, but it would be reasonable for them to expect this from you - and if they have requested this and you have not provided it, it might be considered reasonable for them to pay for insurance covering your property themselves, and then claim this additional cost back from you (although they probably shouldn't claim this via the service charge).

        If I was a potential buyer, this sort of arrangement for insurance would be a big red flag and I would walk away.


          Thank you both,

          It seems my reply did not appear and I am posting it again.

          I don't really know who can change the lease and how? But ideally, I am fine to pay building insurance to the landlord if he charges me by square meters reasonably. As mentioned, my flat is the smallest in the building, I think that's why the lease states I only need to contribute insurance of reserved property (common area) and insure demised property (my flat) by myself. To pay one-fourth insurance of the whole building is unfair (and never happened before) as they are not the same size, not even close. However, the freeholder won't want to charge me by square meters, because he won't be able to take me as an advantage to pay for his use if he does this way.

          As you can see, he doesn't even admit the lease and forces me to pay as he invoiced. Under this circumstance, do you think he can start processing at the Court? He will clearly hire solicitors to help him which I couldn't.

          Because of him, I lost the Stock Transfer Cap protection and the cost increased almost double, not to mention the fairness of the apportionment. To consider the way that he deals with insurance, what will you do if you were me?


            Leases can be changed either by all relevant parties agreeing to the changes or (in certain cases) following application to the FTT and a decision being given in favour of the changes. In both cases each party will usually pay their own legal costs linked to having he leases changed.

            Again, whether the contribution to the buildings insurance that you are being asked for is reasonable or not depends on details that have not been given in this thread.
            Have you seen a copy of the policy that you are being asked to contribute to?
            Have you confirmed that the policy covers more than just the 'reserved parts'?
            What exactly are the 'reserved parts'? In some cases it might be reasonable for each flat to pay at equal contribution towards costs of insuring and maintaining 'reserved parts' even if the properties themselves are not of equal size (it depends on factors such as what each lease requires regarding maintenance of the property as a whole).

            It isn't possible to say whether or not you are being treated unfairly, or whether the freeholder is following the terms of the lease, without more details.

            You have already said that you have paid solicitors - they should have told you exactly what you should be paying for under the terms of the lease, and whether or not you were being charged incorrectly (again with explanations). They should also have advised you whether or not it was worth taking action.


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