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  • Insurance

    Public Liability Insurance - Leasehold flat

    Are other Leaseholders finding that whilst the property is insured by the Freeholder ( which includes Public Liability Insurance cover For THEM  Only )  a P.L. policy alone for a leaseholder is more than the cost of a building Insurance policy which includes P.L cover.

    That's Insurance -crazy !

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    Yep you also can't obtain loss of rent insurance either as that is an option with buildings insurance.

    It is illegal to have two buildings insurance policies.

    There are very many negatives to leasehold rent properties.


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    Paul - I didn't know this.  I've just had one of our leasehold flats re-mortgaged and the lender required a copy of the current building insurance schedule.  Our freeholder is almost impossible to get hold of (she delayed the purchase by about 8 months when we bought).  I couldn't get hold of her, despite very many attempts, for proof of current building insurance schedule so in the end I took my own out which was accepted by the lender.  I'm not sure what I should do in general as I've not paid a service charge in approx 2 years, there is a repair that is quite urgently required to another section of the building - although this doesn't affect my flat.  However, the gardens are being attended to regularly and communal areas are being cleaned regularly.  Any thoughts?

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    Yep your service charges include block insurance.

    You have wasted your money on your own insurance as block insurance takes precedence.

    If you don't pay service charges your lease could be foreclosed on!!

    The only LL insurance you could obtain is Contents.

    You really need to regularise the status of your lease etc.

    You may find that if you don't pay the service charges that you forfeit your lease.

    So make sure you have the service charge amounts available to you when the inevitable SC and GR charges come.

    I would suggest that you seriously consider getting rid of the rental flat.

    Convert it to a minimum 2 bed house.

    Don't buy in a flood area as rental properties arent covered by the Flood Re scheme.

    If the flat suffers loss of amenity then you will have no loss of rent insurance possible.

    The tenant could choose to terminate the tenancy rather than being placed in alternative accommodation while the flat is being repaired.

    Then you have a mortgage to pay with no rent coming in.

    I have trawled the whole of the UK insurance industry and for flats you simply cannot obtain loss of rent insurance.

    For houses not a problem.

    I would NEVER invest in flats again because of this inability to obtain loss of rent insurance.

    I tried to persuade my block insurer via the MA to add this facility to the block policy.

    They weren't prepared to do so.

    EVERY flat owning LL faces this risk.

    This is NOT RGI.

    It is a bit pointless the block insurance paying out to repair a property if by the time it is completed the lender has repossessed.

    The only way I survived a loss of amenity etc was due to credit cards.

    My situation was made even worse due the flat being vacant when it filled up with sewage.

    If this occurs then you are truly stuffed.

    So you need to always have a tenancy in force.

    Even if you make one up with a mate.

    You then get them as a lodger with another friend so that you at least get some lodger rent.

    In short it is a nightmare owning flats because of this loss of rent issue.

    I've had it happen 4 times with my 4 flats.

    I'll be glad when I'm shot of them.

    Houses only in future for me!!!

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