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Coppen estates home insurance penalties?

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Thank you all for your imput, especially Mr Shaw, it has been helpful. I would still appreciate hearing if there are any other people out there that have had any of the same experiences with them and your thoughts on the matter.

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Poor advice. Most houses in Sheffield are leasehold; and most leaseholds involve no real problems at all.

Its just a personal opinion from my experiences of dealing with these people. Why is leasehold in Sheffield so common? No chance of me buying in Sheffield again anyway, once I can retire we're off!

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Historical reason: Industrial Revolution in mid-1800s.

Brief explanation:

 

Major job availability in certain cities- Sheffield, Newcastle, Cardiff, Birmingham- associated with either coal or iron/steel.

Workers newly 'wealthy'.

Can now afford to buy houses, rather than renting.

No planning legislation in those days.

Covenants do not work properly on freehold tenure, only on leasehold tenure.

So houses sold on lease in such areas.

Stamp Duty rate rose for lease of 100yrs. or more.

So leases of 99yrs. very common.

See?

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If a house's leaseholder (T) does not wish to comply with the insurance covenant (and ALWAYS ensure that the covenant is there: occasionally it's not!), there are two ways out:

1. Buy the freehold reversion from its owner (L).

2. Use rights under s.164 of the Commonhold and Leasehold Reform Act 2002. This offers an opt-out if T serves an appropriate Notice on L, demonstrating that T has equivalent or better insurance obtained independently.

 

That is useful to know, thank you. Could you tell me with your knowledge and experience of law, on what grounds do they have a right to implement these penalties. What has the property to do with them? If I had inadequate insurance and it burned to the ground and I was left homeless, how does it negatively affect them?

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The covenant is binding unless T uses one of the options that I mentioned. L (Coppen) is within its rights to enforce, otherwise.

You ask What has the property to do with them?; the answer is that L owns the freehold reversion.

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Historical reason: Industrial Revolution in mid-1800s.

Brief explanation:

 

Major job availability in certain cities- Sheffield, Newcastle, Cardiff, Birmingham- associated with either coal or iron/steel.

Workers newly 'wealthy'.

Can now afford to buy houses, rather than renting.

No planning legislation in those days.

Covenants do not work properly on freehold tenure, only on leasehold tenure.

So houses sold on lease in such areas.

Stamp Duty rate rose for lease of 100yrs. or more.

So leases of 99yrs. very common.

See?

I understand that, but who decided what should be leasehold and what should be freehold? How come this practice was still be being used in the 1980's when the legacy of the coal, iron and steel industries had long gone? My freehold was owned by SCC and sold to Hassals who in turn sold it to Chaps and then onto St Giles Properties.

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Any house's developer is at liberty to decide on what basis (tenure) it wlil be sold.

Coppen does not build houses, remember; it merely acquires portfolios of freehold reversions as investments.

 

But, back on topic, here's s.164:

 

(1) This section applies where a long lease of a house requires the tenant to insure the house with an insurer nominated or approved by the landlord (“the landlord’s insurer”).

 

(2) The tenant is not required to effect the insurance with the landlord’s insurer if:

(a) the house is insured under a policy of insurance issued by an authorised insurer,

(b) the policy covers the interests of both the landlord and the tenant,

© the policy covers all the risks which the lease requires be covered by insurance provided by the landlord’s insurer,

(d) the amount of the cover is not less than that which the lease requires to be provided by such insurance, and

(e) the tenant satisfies subsection (3).

 

(3) To satisfy this subsection the tenant:

(a) must have given a notice of cover to the landlord before the end of the period of fourteen days beginning with the relevant date, and

(b) if (after that date) he has been requested to do so by a new landlord, must have given a notice of cover to him within the period of fourteen days beginning with the day on which the request was given.

 

(4) For the purposes of subsection (3):

(a) if the policy has not been renewed the relevant date is the day on which it took effect and if it has been renewed it is the day from which it was last renewed, and

(b) a person is a new landlord on any day if he acquired the interest of the previous landlord under the lease on a disposal made by him during the period of one month ending with that day.

 

(5) A notice of cover is a notice specifying:

(a) the name of the insurer,

(b) the risks covered by the policy,

© the amount and period of the cover, and

(d) such further information as may be prescribed.

 

(6) A notice of cover:

(a) must be in the prescribed form, and

(b) may be sent by post.

 

(7) If a notice of cover is sent by post, it may be addressed to the landlord at the address specified in subsection ( 8 ).

 

( 8 ) That address is:

(a) the address last furnished to the tenant as the landlord’s address for service in accordance with section 48 of the 1987 Act (notification of address for service of notices on landlord), or

(b) if no such address has been so furnished, the address last furnished to the tenant as the landlord’s address in accordance with section 47 of the 1987 Act (landlord’s name and address to be contained in demands for rent).

 

(9) But the tenant may not give a notice of cover to the landlord at the address specified in subsection ( 8 ) if he has been notified by the landlord of a different address in England and Wales at which he wishes to be given any such notice.

 

(10) In this section:

“authorised insurer”, in relation to a policy of insurance, means a person who may carry on in the United Kingdom the business of effecting or carrying out contracts of insurance of the sort provided under the policy without contravening the prohibition imposed by section 19 of the Financial Services and Markets Act 2000 (c. 8 ),

“house” has the same meaning as for the purposes of Part 1 of the 1967 Act,

“landlord” and “tenant” have the same meanings as in Chapter 1 of this Part,

“long lease” has the meaning given by sections 76 and 77 of this Act, and

“prescribed” means prescribed by regulations made by the appropriate national authority.

 

[PS: I wish that computers did not convert an '8' within parentheses into a smily face!]

Edited by Jeffrey Shaw

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I do remember instructions from my solicitor to send a copy of my alternative insurance documents to Coppen as soon as I moved in, which I did, and I understood at the time that was the end of the matter. However they still continue to charge me, even though I have wrote to them explaining this. Is this the same as 'serving notice'?

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This leasehold is going to be a problem in the future around the area where I live. A lot of residents have not bought the freehold, so with under 70 yrs remaining on the leasehold I can see it affecting the price of the surround properties., 20 yrs down the line, they will be practically worthless as the cost of the freehold will be astronomical. As the properties will then be difficult to sell, they will be sold at auction and opened up to the rental market.

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It's not a new problem.

The answer's obvious: buy the freehold reversion asap and preferably before the lease's

unexpired term drops below 80yrs.

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It's not a new problem.

The answer's obvious: buy the freehold reversion asap and preferably before the lease's

unexpired term drops below 80yrs.

I see where you are coming from Jeffrey and I agree with your comments. At the end of the day it comes down to the mentality that 'we can't afford it and it'll be fine', when in fact it won't. The people who have not bought the freehold bury their heads in the sand, rightly or wrongly and will pay the price 20yrs down the line when their property is worth very little. The whole area then goes into decline as the properties are sold way below market value. How many ignored the shortfall issues with endowment mortgages hoping if they didn't think about it, it would go away?

My point is that the leaseholder is not going to put up £4-5k when they can't see any immediate advantage?

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We bought our freehold and it was the best money we spent. However, my family member's property is a flat, in a block of four - are there separate rules for this? In any case, is it better that flats remain leasehold? Also, I am wondering why the OP has been singled out when others haven't?

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