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Buildings insurance on a leasehold flat - who pays?


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Hi all,

 

Looking for some advice from those people out there who own or have owned a leasehold property.

I'm in the process of buying a leasehold flat and in the paperwork that the solicitor has sent me is a copy of the buildings insurance policy taken out by the freeholder.

 

While I understand that normally it is the freeholder's responsibility to get the insurance in place, who actually pays?  

Do they pass on the cost to all the leaseholders somehow?  I don't see it specified on the past annual service charge bills, so wondering if it is covered separately.

 

Any experience you've had with leasehold properties would be much appreciated.

 

Cheers

Kylie

Check out my property journey here:  http://diytopropertyinvestor.co.uk/

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Hi Kylie

 

Step one is to always check the terms of the lease between the freeholder and you - it should be set out in there. It is long, boring and full of legal speak but essential reading.

 

Normally, the responsibility to arrange lies with the owner / freeholder and mostly the cost of passed down to the leaseholder, either directly by paying a bill for insurance, or indirectly as a component of the service charge or perhaps included within the ground rent (although the latter is unlikely). I guess it is possible that no additional charge could be passed on by the freeholder also but I have never seen that!

 

The lease should set things out but also bear in mind that this insurance relates to the building only and so a Landlord's contents and liability policy is also advisable for you to arrange yourself.

 

By the way - when you are reading the lease terms, also look out for conditions around rentals and permissions etc...I had one where the freeholder could vet tenants and also charge me a fee for giving their consent and similar with sales...cheeky b.....s!!

Richard W J Brown a.k.a. The Property Voice

Property Investment Strategist

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