Backdated Buildings Insurance on 999 year lease - help please

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    Backdated Buildings Insurance on 999 year lease - help please

    First time post here so thank you for taking the time to read.

    I own a 999 year lease of a flat which states that the buildings insurance is the FH's responsibility, and is also classified as additional rent.

    I lost contact with the FH a couple of years after buying the lease in 2000 and have only just re-established contact this year. Throughout that time the FH never notified me of the building insurance nor demanded payment for my share. As we were not in contact, I insured my flat of my own accord for some of those years, albeit learning recently that this is actually invalid.

    Upon re-establishing contact this year, it was me that brought up the buildings insurance, and requested confirmation of it and for us to sort things out so everything is properly insured going forward. This was back at the start of this year, and after sending several texts throughout the year asking again and again for the confirmation of the insurance and getting no reply from the FH, I called and spoke to him about it. He said there is and always has been insurance, and that yes we need to pay our share (which I agree with and want to do), but he also said that we need to go all the way back to the start.

    My questions are:

    1. How far back can it be backdated? I have read conflicting responses on here about whether the insurance is classified as rent or a service charge, so I am a bit confused.

    2. During our conversation, the FH put the onus on me to have paid the insurance to him over the years. This doesn't sound logical to me as I have never been notified of the premiums that were paid, or forwarded any insurance documents, so I would not have known how much to pay. I am aware logic may not apply here so I apologise if that is the case.

    3. I have pasted excerpts of the lease that I think correspond to my query below:

    "...the yearly rent of one peppercorn AND ALSO PAYING as additional rent

    (a) N/A to insurance
    (b) a sum or sums of money equal to 30% of the amount or amounts from time to time paid by the Landlord for the insurance of the Buildings in accordance with the covenant in Clause 4(2)


    (2)That the Landlord will at all times during the said term (unless such insurance shall be vitiated by any act or default of the Tenant) insure and keep insured the Building under fully comprehensive policy against loss or damage by fire and such other risks (if any) as the Landlord thinks fit in some insurance office of repute to the full cost thereof of completely rebuilding replacing and reinstating the same and to make all payments necessary for such purposes within fourteen days after the same shall become payable and whenever reasonably required produce to the Tenant at the expense of the Tenant the policy or policies of such insurance and the receipt for the last premium for the same and will in the event of the Building being damaged or destroyed by fire or other insured risk as soon as reasonably practicable rebuild or replace or reinstate the Building out of and to the extent of the insurance monies. "

    I have been unable to find a thread on here that relates to my situation exactly so I appreciate any help, advice and constructive comments that you have to offer. Other threads mention demands for payments but I would like to reiterate that there have been none from the FH.

    Thank you in advance.

    It is unclear how you lost contact with the freeholder and how you can say that he/she did not issue any demands?

    1 The Limitation Act 1980 restricts the freeholder taking enforcement action to 6 years however there does not seem to be anything to stop the freeholder from carrying forward arrears and insisting on them being settled when you wish to sell or remortgage. You would also need to be extremely careful when making payments otherwise the freeholder will apply them to the oldest debt and may do so even if you expressly state otherwise.

    2 You are both right, you should contact the freeholder and make him/her aware of where to send demands, the freeholder should issue demands to you,


      Thank you for your reply.

      There was no specific reason for losing contact, it just happened that way after the original FH sadly passed away and left the property to his immediate family (who I am referring to as the current FH). There were never any issues in the building (it is just my flat and a shop below) to have to speak to the FH about, although in hindsight the insurance is of course one of them.

      The FH always had my full address as it is the same as what is on the lease. I have never received any post at my home address or the flat address (it is rented out and is the same tenant that was there when I purchased it).

      After learning that taking out my own insurance was invalid, I got the FH contact number from his shop tenant. Otherwise we'd still be plodding along now as we were without any contact.


        I agree that it is odd that the freeholder has never issued demands and has never chased you to settle the outstanding balance. The freeholder's position is that he/she has insured the building in accordance with the lease and you are required to pay your proportion of the premium. The amount must be reasonable and I doubt that the freeholder will be able to supply evidence of the premium for each year at this stage, Your best option is to try to reach some agreement with the freeholder to settle the matter, it is not in either of your interests to take legal action and you do not want problems when you try to sell or remortgage your property,


          It sounds like your freeholder potentially doesn't know what he is doing.
          Legally, they were required to notify you that they had taken over as freeholder (you would have had no obligation to contact them as none of your details had changed and there would be no reason to assume you would know who to contact).

          Insurance comes under service charges, and these aren't legally payable unless properly demanded. If you definitely haven't received any notification of costs, anything more than 18 months old would now not legally be owed.
          However, if this did go to a court/tribunal, the freeholder might produce paperwork and say that this had all been left at the flat, and if the court/tribunal accepted this they might say that 6 or 12 years of costs are payable (one of these applies to rent but off hand I can't remember which).

          It may be easier to offer to pay a proportion of the previous costs, just to try and avoid ending up with a poor relationship with the freeholder just in case you need them to do something for you in the future- it's up to you how much you want to fight.


            We can only speculate on what the freeholder will say, He/she may say that correspondence and demands were issued to you at the property address which would normally be sufficient. In addition, it does not appear to have been too difficult for you to make contact with the freeholder when you chose to do so.

            You could apply to a Tribunal to determine what is actually payable but they would not normally consider charges more than 6 years old. They have been known to make exceptions but you cannot rely on that. I am not at all confident that you would succeed with a claim before a Tribunal unless you can claim that the charges are unreasonable. the Tribunal is likely to find that you must have been aware that the building needed to be insured, so I doubt that you would succeed with a claim under the 18 month rule. On the other hand, the freeholder would have a lot of explaining to do and much would depend on how he/she comes across under questioning.

            I recommended an attempt at an amicable settlement because any form of legal action usually results in a lot of time and expense for all concerned and it would put strain on the relationship between you and the freeholder moving forward. You could always try an informal chat with the freeholder and try to understand his/her position better eg were demands issued, if so where? If not, why not?


              Thank you again for the further responses.

              I agree with all your points above regarding an amicable solution. The purpose of my enquiry was to try to understand where we both stand on the matter from a legal perspective. I have no desire to go down the legal route if it can be avoided. There is currently no hostility and we are on good-ish terms, all things considered.

              Our chats have all been informal in the sense that they have been friendly telephone calls and nothing has been written down. I did ask why he had not sent anything to me over the years and rather than answering the question he turned it around and put the onus on me, as I mentioned in my first post.

              In our last conversation, it was me who asked for an email address to continue our correspondence in writing rather than verbal and to move things forward. He seems to be waiting on me to come to him rather than just sending me an invoice and the policy documents.

              I agree it is a very odd situation to be in and my strongest assumption is that the freeholder never insured the property, otherwise I'm sure he would have sent me invoices for monies that would have been owed. But that is purely an assumption.


                I don't think that anyone can advise precisely what the legal position is without understanding better the freeholder's position. He is wrong, it is not for you to approach him to ask him how much you owe, it is primariliy for him to issue valid demands as Macromia says in #5, He has a point that you could have contacted him when you became aware that you were not receiving demands. Instead you chose to take out insurance yourself which was incorrect but you may be able to use that as a bargaining tool when trying to reach a settlement, it is not as though you have benefitted by a huge amount over the years. A freeholder would normally wish to recover expenditure as soon as possible, If he has not insured the building, that is another matter and you are entitled to ask for evidence of the insurance cover.


                  Its good that you are being amicable but that may not last, many valid points raised above but considering that 6 or 12 years of insurance costs could be many (tens) of thousands I certainly wouldnt be rushing to pay such a large sum.

                  It does sound as if the FH doesnt know what he is doing and he may well of lost any legal right to the monies, ultimately thats his loss.
                  Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                  I do not accept any liability to you in relation to the advice given.

                  It is always recommended you seek further advice from a solicitor or legal expert.

                  Always read your lease first, it is the legally binding contract between leaseholder and freeholder.


                    A bit of an aside, but you may be able to claim a refund for the buildings insurance you took out yourself. Google "dual insurance refund". I did this recently and got close to £5k back as I had been insuring my flat unknowing that the freeholder had already done so.


                      Originally posted by eagle2 View Post
                      I don't think that anyone can advise precisely what the legal position is without understanding better the freeholder's position.
                      The legal position relies pretty much entirely on whether or not the freeholder has provided notices/service charge demands (or at least, on whether or not they can convince a court/tribunal that they have).

                      Personally, I would be asking them for copies of all prior communications that they have (if any), along with details of where/when/how they sent.


                        There are some very good comments made by others. I suggest that the priority should switch to obtaining evidence that the freeholder has indeed insured the building, there is too great a risk if he has failed to carry out his duty to insure. I suspect that you will need the evidence if you are to claim a refund as suggested at #10. Whether or not he issued any demands becomes subsidiary to whether or not he has actually insured the building and he is entitled to issue any demands. Any negotiations should also depend on whether or not he has insured and also whether or not you are able to recover any of the payments which you have made.

                        I accept that others may be right, the freeholder may not know what he is doing, we must make assumptions when we receive one side of the story and it is quite possible that I have been over generous towards the freeholder.


                          Prior to any decision on how much you might offer to pay you should try to establish how much the freeholder might potentially be awarded if this went to a court/tribunal.
                          If you can get them to admit in writing that they haven't invoiced you for any costs, you will be in a very strong position to offer to pay only a relatively low amount, as they will then only realistically be able to claim any costs that they have paid within the 18 months prior to notifying you of the amount.
                          Communication sent via email should be sufficient if they say that they haven't told you how much they expect you to pay.

                          Once you know how much you are likely to be legally liable for, you can then decide whether or not you wish to offer to pay any more than that just to try and keep the freeholder/leaseholder relationship good.


                            I like the advice given in post 10. You could perhaps try. The freeholder has carried out its obligation under the lease, to insure; but an insurance premium under the '02 Act is very technically a service charge even if the lease reserves the premium as rent.

                            Hence unless the freeholder gave notice in some way that the insurance premium would become payable, the freeholder cannot start legal process for unpaid premia going back more than 18 months from the date of demand. However being in dispute with your freeholder is not recommended; especially as at some stage you might want something from them such as a consent. I would therefore try going down the route suggested in post 10 and paying up at the least the current years' premium. The freeholder ought to have reached out to you rather than letting years elapse. It seems from what you say it would have been easier for the freeholder to reach you than the reverse. I think the freeholder is quite likely to have to write off some premium that had not been requested within eighteen months of being incurred.


                              Originally posted by Macromia View Post
                              they will then only realistically be able to claim any costs that they have paid within the 18 months prior to notifying you of the amount.
                              The Tribunals tend to apply the 18 month rule only when the leaseholder is genuinely unaware of the expenditure and that it is difficult if not impossible to argue with insurance


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