Insurance Provisions of Lease

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    Insurance Provisions of Lease

    Our solicitor has just informed us that the insurance provisions of lease on the flat we are buying, do not comply with modern requirements. She will therefore have to refer this to the lender. Anybody have any advice on this?

    Secondly, the management company is not owned by the lessees, and our solicitor seems to think this is unusual.

    #2
    Not sure what this means. Why does management company necessarily need to be owned by the lessees (unless they own it).

    In what way are the insurance provisions un-modern? is the lease "modern"? What "requirement"?

    What is the obligation on a solicitor to point out a defect in a lease (if there is one) to the lender unless the lender was earlier misled. The lender can make up their own mind about a lease?

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      #3
      I have no idea on either point which is why I’m asking. I thought someone may know the answer.

      Comment


        #4
        Perhaps your solicitor needs to explain what the problem is. Doubt any of us can without reading the lease and examining the land registry record of ownership.

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          #5
          As I understand ( which is where the problem lies) I have no knowledge of these things, is that the insurance obligation by the freeholder doesn’t meet today’s requirements therefore possibly leaving the building uninsured to some degree?
          She is contacting the MA to check whether the insurance taken actually does meet the new requirements even if the lease does not stipulate this. I will ask her why she is obliged to inform the lender as this is a good point. Thank you.

          Comment


            #6
            Originally posted by SandraHope View Post
            ... the management company is not owned by the lessees, and our solicitor seems to think this is unusual.
            This one is easy to answer. As said above, management companies often if not commonly are externally 'owned'. Whether this means an investor freeholder who sees owning freehold as a safe asset, or a managing agent acting for the freeholder who earns a nice living from leasehold opportunities. I like your solicitor's style, mind. Nowadays leaseholders ought to own their own freehold entirely. Unlikely the law will chamnge any time soon to achieve that more easily.

            Originally posted by SandraHope View Post
            ... insurance obligation by the freeholder doesn’t meet today’s requirements therefore possibly leaving the building uninsured to some degree?
            Tougher one. Unless she means lessees' interests and all mortgage lenders' interests are not expressly mentioned? They should be expressly included on the paperwork as far as I recall reading. Other than that, presumably there are more risks these days - cladding maybe? Along those lines. I'd be more inclined to listen to her on this as your come back would be to her if something went wrong later. Solicitors have had a kicking over leasehold conveyancing in recent years and are being far more cautious these days.

            Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

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              #7
              Thank you for your advice. I will definitely heed her words.

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