voovon   10 #1 Posted November 6, 2018 Hoping someone has been in the same situation as this:  A friend of mine has just completed on a leasehold terraced house bought at auction, they were told to take out buildings insurance from the exchange so did so.  Now they have received a letter from a property management company which collect ground rent (£2 per year) roughly the cost of the letter sent out! They state that the buildings insurance must be in joint names with the freeholder and a non-invalidation clause be added and then go on to mention their website where a quote can be obtained  Their current insurer can not add this so the policy will have to be cancelled.  Has anyone come across this before? and if so which insurance company did you use for a reasonable quote, they want to avoid using the company's website if possible.   Thanks. Share this post Link to post Share on other sites Share this content via...
helloitsonly   10 #2 Posted November 6, 2018 Hoping someone has been in the same situation as this: A friend of mine has just completed on a leasehold terraced house bought at auction, they were told to take out buildings insurance from the exchange so did so.  Now they have received a letter from a property management company which collect ground rent (£2 per year) roughly the cost of the letter sent out! They state that the buildings insurance must be in joint names with the freeholder and a non-invalidation clause be added and then go on to mention their website where a quote can be obtained  Their current insurer can not add this so the policy will have to be cancelled.  Has anyone come across this before? and if so which insurance company did you use for a reasonable quote, they want to avoid using the company's website if possible.   Thanks.  you dont have to use the freeholders specified insurer, leaseholder reform act 2002 Share this post Link to post Share on other sites Share this content via...
geared   317 #3 Posted November 6, 2018 As above, they just want to con you out of some money.  This should be of some help;  https://www.servicechargedisputeguide.info/section-164-insurance-for-leasehold-houses/ Share this post Link to post Share on other sites Share this content via...
voovon   10 #4 Posted November 6, 2018 Thanks, and thought as much about the con.  Problem is my friend has tried other insurers but most won't offer the invalidation clause, or when adding a joint policy holder, can't add the freeholders company name as they require a Mr/Mrs and a date of birth. Even an insurer which was on the management companies list has said via online chat that a company can't be added as a joint policy holder! And then directed them to a landlords insurance website!  Worried they might have to bite the bullet and use the shady managements website.  ---------- Post added 07-11-2018 at 12:10 ----------  Just to update anyone who is interested or can offer more advice.  My friend has checked their lease paperwork and appears to be nothing mentioned about having joint named insurance or the non-invalidation clause and their solicitor is looking into it..... Share this post Link to post Share on other sites Share this content via...
topflat29 Â Â 10 #5 Posted November 7, 2018 You can serve a notice which allows you to choose the insurance provider. Â https://www.lease-advice.org/faq/i-am-a-leaseholder-of-a-house-and-my-lease-requires-me-to-arrange-insurance-with-an-insurer-nominated-or-approved-by-my-landlord-is-there-any-way-of-choosing-my-own-insurer/ Â ---------- Post added 07-11-2018 at 17:42 ---------- Â What is the unexpired years remaining on the lease term ? What is the annual ground rent ? Share this post Link to post Share on other sites Share this content via...
voovon   10 #6 Posted November 7, 2018 I've read their letter and have been looking at the lease paperwork, it does say something about insurance in joint names, in old english and could easily be misinterpreted.  Ground rent is low, £2 something per year and around 700 years left on the lease. They are trying to buy the freehold but know they can't force the sale of it until after 2 years.  The letter does say they can use their own insurance as long as it is in joint names with the non-invalidation clause, but have not found any providers that can do this yet. Still waiting on solicitors. Share this post Link to post Share on other sites Share this content via...
geared   317 #7 Posted November 7, 2018 Have you (your friend) asked the freehold owner what exactly the non-invalidation clause actually provides??  It seems quite strange. Share this post Link to post Share on other sites Share this content via...
voovon   10 #8 Posted November 7, 2018 Yes it is strange, even the solicitors have said so and are still looking into it, the letter states it is to "protect the ground rent interests", they don't want to contact the freeholder yet until they have all the facts. I believe, reading from google the clause tries to keep the insurance still valid even in the event of a breach of conditions.  It seems more applicable to Landlords insurance when renting out, not domestic homeowners. Share this post Link to post Share on other sites Share this content via...
Moostar   0 #9 Posted October 19, 2019 Hi! This thread is a bit old now but I'm glad I found it. I've been stressing out about something very similar...and this thread is helpful.  I recently received a letter with similar wording to "protect the ground rent interests" and mentioned adding a non-invalidation clause. We received the letter after we had already made arrangement for home insurance (which we needed for the exchange). Out solicitors have no idea what they're talking about, and our insurance company doesn't know either.  Did you manage to resolve this and figure out what was needed? interestingly our letter also directs us to their own insurance policies which they are trying to sell....  Thanks Share this post Link to post Share on other sites Share this content via...
voovon   10 #10 Posted October 20, 2019 Hi Moostar, it all ended up ok after what was also an annoying and stressful time for my son, it sounds it could be the same freeholder/management company combo.  I don't know why they ask for this as it seems to me a non-invalidation clause is more suited to commercial properties as he found only commercial insurers would even offer this.  His solicitors advised him to add the freeholder as an "interested party" only and make sure the fire risks in particular were covered as this was stated in the leasehold paperwork, (written in old English). This meant he had to cancel his original insurance as an interested party could not be added.  From the links helpfully mentioned above he sent them a letter titled "Form of notice of cover" written in line with the leasehold reform act 2002, and paperwork showing the fire insurance cover with them as interested party only, it seemed to do the trick, I can let you know how it was worded if you need me to.  He has since managed to buy the freehold by informally asking and negotiating, this took around 6 months and cost far more than it should have but was worth it, he can now carry out alterations legally and unhindered by the nasty freeholder. Share this post Link to post Share on other sites Share this content via...
topflat29   10 #11 Posted October 21, 2019 For some leasehold houses on 999 years lease and paying £2 per year ground rent, the FTT will put the cost to buy the freehold at 14-18 times annual ground rent.  So the ground rent interest is only worth £40. It does not need insuring . Make a complaint to your local MP. Share this post Link to post Share on other sites Share this content via...
Jeffrey Shaw   90 #12 Posted October 29, 2019 On 21/10/2019 at 12:56, topflat29 said: For some leasehold houses on 999 years lease and paying £2 per year ground rent, the FTT will put the cost to buy the freehold at 14-18 times annual ground rent.  So the ground rent interest is only worth £40. It does not need insuring . Make a complaint to your local MP. Misleading! The insurance is not for just the freehold reversion/ ground rent but for the entire house's value. However, the landlord (reversioner) can direct insurance- or insist of a 'non-invalidation' rider- only if the lease itself so allows. Share this post Link to post Share on other sites Share this content via...