RTM Insurance Claims

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    RTM Insurance Claims


    An RTM Co organises the building insurance in a large block where the premium is paid equally by all leaseholders. The RTM Co does NOT include all leaseholders, nor does it include the freeholder.

    Should insurance claims be discussed, disclosed or agreed with all leaseholders and/or the freeholder ? Or can the RTM Co manage all claims without transparency ?


    Well pretty much nothing about the management of the leaseholder-freeholder relationship is "transparent", "agreed", "discussed" or "disclosed" - so not sure why you expect this to be different. RTM is often the nightmare version of the scenario - often much worse than management by an external freeholder when things go wrong.

    What is the exact problem of which you are distressing?


      Originally posted by grazbo View Post
      The RTM Co does NOT include all leaseholders, nor does it include the freeholder.
      But the buildings insurance DOES.
      The insurance covers all the building. and it's the freeholders building.

      If you have to make a claim, not everyone needs to know about it, depending on the claim.

      Tree branch falls on next doors car and claim is made and payment made.
      Underground drains crack / grass roots block. You make a claim if covered.
      Leaseholders cover their own flat for breakages, theft / fire and leaks.

      S wha is the problem, if any ?

      The rtm management decide on the insurance policy ( usually a standard "Blocks of flats policy ).
      That is why it's called a "Right to manage".


        Thanks ram and AndrewDod , to add some context; I am suspicious about a number of insurance claims. I am not the claimant - rather, each claim was made by a director of the RTMCo.

        At best, this may be taking advantage of the situation, where directors of the RTMCo make claims against the insurance whenever it suits, always based on issues regarding their respective flats. If issues arise with a property that belongs to a director of the RTMCo, a claim is registered and monies are received, without any communication to L/Hs or F/Hs.

        There appears to be no paper or email trail available. There is no way to verify the validity of any issue or the value of the claim. The first anyone outside of the RTMCo knows is when the insurance premium increases.

        At worst, it may be fraudulent, where an individual director exploits the freedom to make claims without recourse, and makes up a random claim value (higher than the actual cost to rectify)

        Ethically I presumed that each claim would be transparent to L/H and F/H - or at least as a minimum, there would be an "audit" trail managed by the RTMCo which could be requested by the F/H and other L/Hs.

        From another perspective, maybe the question is : how can an RTMCo (and its directors) be held to account for claims made to an insurance company ?


          It is a common scenario - theft by dominant RTM participants or majority owner Directors of RMCs. Unfortunately there are few if any feasibly actionable legal protections either under Company Law or Leasehold law. Whatever you do you are in a cleft stick. You could report potentially fraudulent claims to the insurers - but you will end up paying a higher price for insurance. Or you could sue yourself. Or you could apply to the FTT to have a manager appointed which will cost you a lot in high management fees (and many FTT appointed managers are outright crooks and opportunists too) -- but fiddling the insurance and common types of cheating may not reach the bar for FTT appointment - so it depends what other management malfunction exists.

          I have no doubt what you feel is happening is probably happening. Figuring out what to do about it is trickier.


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