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Ground Rent and Building Insurance

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By (user no longer on site) OP   
over a year ago

Has anyone any experience of ground rent companies dictating who you get your buildings insurance with?

We have had threatening letters from our ground rent company saying that we have to go with a certain company but I've gone with someone cheaper. We weren't told about this by our solicitor when we signed the contract.

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By *ugby 123Couple
Forum Mod
over a year ago

O o O oo

I wouldn't have thought they can dictate to you which insurance you use unless it is in your lease, which the solicitor would have probably pointed out.

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By *ugby 123Couple
Forum Mod
over a year ago

O o O oo

To add , we have bought two places with a leasehold and used whoever we wanted

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By (user no longer on site) OP   
over a year ago


"I wouldn't have thought they can dictate to you which insurance you use unless it is in your lease, which the solicitor would have probably pointed out."

They're sending threatening letters - when we signed the contract the solicitor asked who I was getting insurance with so I told her and gave her the details too. She didn't say anything about it and when I rang them they weren't aware, yet we are getting threatening letters. Bit scary really.

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By *teveanddebsCouple
over a year ago

Norwich

Sounds like they are trying it on.

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By *ugby 123Couple
Forum Mod
over a year ago

O o O oo

If the solictor isn't aware then I can't see it being in the contract

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By *linky12Man
over a year ago

Bolton le Sands

hi

Your lease will dictate whoyou go with

Its usually the management co's responsibility to sort it

Cheaper dont mean better and it wont be valid if your lease says otherwise.

First rukle of comedy; leasehold isnt freehold.

good luck

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By (user no longer on site) OP   
over a year ago


"If the solictor isn't aware then I can't see it being in the contract

"

Just caught my neighbour and he said they've had the same problems and were close to talking to the local MP as the threatening letters are quite scary - might be a case of us all going to see her.

Looking on an internet forum about it (not sure if I'm allowed to name it so won't) the sure fire way to get them off our backs is to buy the lease out - which is lots of money.

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By (user no longer on site)
over a year ago

As it's now not allowed for lenders to force you into a particular insurance deal I am sure that lease holders can't either! BUT check it out with someone who knows... cos I am only guessing!

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By (user no longer on site) OP   
over a year ago


"As it's now not allowed for lenders to force you into a particular insurance deal I am sure that lease holders can't either! BUT check it out with someone who knows... cos I am only guessing! "

There's no mortgage company as my mum bought the house outright with money left after Dad had died. My neighbour said his mortgage company had been brought into it by the ground rent company but that doesn't apply to us.

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By (user no longer on site)
over a year ago

Send all letters to your solicitor keep copies also write to the company giving your solicitirs info and all letters must go to them.

Legally they have no keg to stand on it sounds like they get percentage of contracts with their preferred insurance company.

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By *ugby 123Couple
Forum Mod
over a year ago

O o O oo

Is it a huge difference in price ?

Do you get the same amount of cover?

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By (user no longer on site) OP   
over a year ago


"Send all letters to your solicitor keep copies also write to the company giving your solicitirs info and all letters must go to them.

Legally they have no keg to stand on it sounds like they get percentage of contracts with their preferred insurance company."

What concerned me was the solicitor (Who's a well known conveyancing solicitor in the area) had only had one experience of this before. I'm taking the letters in on Monday. Mum is, understandably, rather stressed about it.

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By (user no longer on site)
over a year ago

ur solisiter is negligent by not informing u x

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By (user no longer on site) OP   
over a year ago


"Is it a huge difference in price ?

Do you get the same amount of cover?"

The cover I get is through my bank - I couldn't get a better quote with the cover (which includes pretty shit hot legal stuff and will cover my clarinet which is the biggy) I didn't look at the approved one when I got the quotes. Will look now though - however if we change we have to pay £60 to the ground rent company.

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By (user no longer on site)
over a year ago

Didn't know you had ground rent to pay? As that's usually just in relation to flats, rather than houses?

But you cannot legally be forced to use one provider - even with a mortgage, so long as you have buildings insurance to cover the rebuild cost you are fulfilling the obligations of the mortgage contract!

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By *ugby 123Couple
Forum Mod
over a year ago

O o O oo


"Didn't know you had ground rent to pay? As that's usually just in relation to flats, rather than houses?

!"

No, houses can be on a lease too...they are normally huge ones though, the house we bought many years ago had 999 years on.

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By (user no longer on site) OP   
over a year ago


"Didn't know you had ground rent to pay? As that's usually just in relation to flats, rather than houses?

But you cannot legally be forced to use one provider - even with a mortgage, so long as you have buildings insurance to cover the rebuild cost you are fulfilling the obligations of the mortgage contract!"

Yeah there's ground rent to pay. Its £3.60 a year!

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By (user no longer on site)
over a year ago


"Didn't know you had ground rent to pay? As that's usually just in relation to flats, rather than houses?

!

No, houses can be on a lease too...they are normally huge ones though, the house we bought many years ago had 999 years on."

Yep - sorry was having a blonde moment!

Only ever bought freehold houses and leasehold flats before! Doh!!!

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By (user no longer on site) OP   
over a year ago


"Didn't know you had ground rent to pay? As that's usually just in relation to flats, rather than houses?

!

No, houses can be on a lease too...they are normally huge ones though, the house we bought many years ago had 999 years on.

Yep - sorry was having a blonde moment!

Only ever bought freehold houses and leasehold flats before! Doh!!! "

The companies seem to make their fortune by charging stupid amounts of money for changing anything. My poor mother is having kittens - which of course means I'm having them by proxy!

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By (user no longer on site)
over a year ago

Rubes - just found this online!!

Insurance through the landlord's nominated or approved insurer - Houses

Some leases, usually of houses, require the leaseholder to insure the property with an insurer nominated or approved by the landlord. Under provisions in the Commonhold and Leasehold Reform Act 2002 the leaseholder of a house is entitled to place the insurance with his own choice of insurer, as long as he gives notice to the landlord and complies with certain requirements relating to the cover arranged. Please note this only applies to leasehold houses NOT flats.

The insurance arranged by the leaseholder must:

•be with an 'authorised insurer', which means an insurer operating within the requirements of the Financial Services and Markets Act 2000;

•cover the interests of both the leaseholder and the landlord;

•provide cover to a sum not less than the amount required under the lease;

•cover all the risks which the lease requires be covered by insurance.

As long as these conditions are met, the leaseholder cannot be required to insure through the landlord's nominee.

He may therefore arrange his own insurance, but must serve a Notice of Cover on the landlord no later than 14 days after having placed the insurance (or within 14 days of any request by the landlord). The notice must be in the prescribed form and must specify:

•the name of the insurer;

•the risks covered by the policy;

•the amount and period of the cover;

•the address of the house insured;

•the registered office of the authorised insurer;

•the number of the insurance policy;

•the frequency that premiums are payable;

•the amount of any excess payable under the policy and what the excess applies to;

•whether the policy has been renewed (and the date);

•a statement that the leaseholder is satisfied that the policy covers their interests;

•a statement that the leaseholder has no reason to believe that the policy does not cover the interests of the landlord.

The prescribed form and contents of the Notice of Cover are set out in SI 2004/3097 and 2005/177, in relation to England, and SI 2005/1534, in relation to Wales.

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By (user no longer on site) OP   
over a year ago


"Rubes - just found this online!!

Insurance through the landlord's nominated or approved insurer - Houses

Some leases, usually of houses, require the leaseholder to insure the property with an insurer nominated or approved by the landlord. Under provisions in the Commonhold and Leasehold Reform Act 2002 the leaseholder of a house is entitled to place the insurance with his own choice of insurer, as long as he gives notice to the landlord and complies with certain requirements relating to the cover arranged. Please note this only applies to leasehold houses NOT flats.

The insurance arranged by the leaseholder must:

•be with an 'authorised insurer', which means an insurer operating within the requirements of the Financial Services and Markets Act 2000;

•cover the interests of both the leaseholder and the landlord;

•provide cover to a sum not less than the amount required under the lease;

•cover all the risks which the lease requires be covered by insurance.

As long as these conditions are met, the leaseholder cannot be required to insure through the landlord's nominee.

He may therefore arrange his own insurance, but must serve a Notice of Cover on the landlord no later than 14 days after having placed the insurance (or within 14 days of any request by the landlord). The notice must be in the prescribed form and must specify:

•the name of the insurer;

•the risks covered by the policy;

•the amount and period of the cover;

•the address of the house insured;

•the registered office of the authorised insurer;

•the number of the insurance policy;

•the frequency that premiums are payable;

•the amount of any excess payable under the policy and what the excess applies to;

•whether the policy has been renewed (and the date);

•a statement that the leaseholder is satisfied that the policy covers their interests;

•a statement that the leaseholder has no reason to believe that the policy does not cover the interests of the landlord.

The prescribed form and contents of the Notice of Cover are set out in SI 2004/3097 and 2005/177, in relation to England, and SI 2005/1534, in relation to Wales.

"

Its not classed as rented though, its Mum's property. She doesn't have landlord insurance, we just have buildings and contents insurance. The approved company's quote is no higher than what I'm paying, but it doesn't have legal cover or any of the extras I currently get.

I'm confuddled

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By (user no longer on site)
over a year ago

The above covers leases - not just rentals!

Effectively (as far as I read it!) the 'landlord' in your case is whoever owns the freehold!

You could always look at buying the freehold out! Always worth asking how much and having looked online it doesn't look hugely expensive in all cases!

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound


"The above covers leases - not just rentals!

Effectively (as far as I read it!) the 'landlord' in your case is whoever owns the freehold!

You could always look at buying the freehold out! Always worth asking how much and having looked online it doesn't look hugely expensive in all cases! "

My reading too - the rental is the ground rent.

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By (user no longer on site) OP   
over a year ago


"The above covers leases - not just rentals!

Effectively (as far as I read it!) the 'landlord' in your case is whoever owns the freehold!

You could always look at buying the freehold out! Always worth asking how much and having looked online it doesn't look hugely expensive in all cases!

My reading too - the rental is the ground rent."

Yeah that's what the internet forum alluded to - I think that may be the best option.

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound


"The above covers leases - not just rentals!

Effectively (as far as I read it!) the 'landlord' in your case is whoever owns the freehold!

You could always look at buying the freehold out! Always worth asking how much and having looked online it doesn't look hugely expensive in all cases!

My reading too - the rental is the ground rent.

Yeah that's what the internet forum alluded to - I think that may be the best option. "

Possibly to your advantage is that the property is outside of London and the ground rent is low. I can't afford the £25k to buy half of my freehold.

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By (user no longer on site) OP   
over a year ago


"The above covers leases - not just rentals!

Effectively (as far as I read it!) the 'landlord' in your case is whoever owns the freehold!

You could always look at buying the freehold out! Always worth asking how much and having looked online it doesn't look hugely expensive in all cases!

My reading too - the rental is the ground rent.

Yeah that's what the internet forum alluded to - I think that may be the best option.

Possibly to your advantage is that the property is outside of London and the ground rent is low. I can't afford the £25k to buy half of my freehold."

I've sent Mum a link and said it may be better to buy the freehold or whatever its called. This is a headache and I already have grey hairs!

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By (user no longer on site)
over a year ago


"The above covers leases - not just rentals!

Effectively (as far as I read it!) the 'landlord' in your case is whoever owns the freehold!

You could always look at buying the freehold out! Always worth asking how much and having looked online it doesn't look hugely expensive in all cases!

My reading too - the rental is the ground rent.

Yeah that's what the internet forum alluded to - I think that may be the best option.

Possibly to your advantage is that the property is outside of London and the ground rent is low. I can't afford the £25k to buy half of my freehold.

I've sent Mum a link and said it may be better to buy the freehold or whatever its called. This is a headache and I already have grey hairs!"

Just shave/wax them!

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By *teveanddebsCouple
over a year ago

Norwich


"Is it a huge difference in price ?

Do you get the same amount of cover?

The cover I get is through my bank - I couldn't get a better quote with the cover (which includes pretty shit hot legal stuff and will cover my clarinet which is the biggy) I didn't look at the approved one when I got the quotes. Will look now though - however if we change we have to pay £60 to the ground rent company."

Can you not use the legal cover to get advice? Most times there is a phone number you can call. It is in their interest to help after all

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By (user no longer on site) OP   
over a year ago


"Is it a huge difference in price ?

Do you get the same amount of cover?

The cover I get is through my bank - I couldn't get a better quote with the cover (which includes pretty shit hot legal stuff and will cover my clarinet which is the biggy) I didn't look at the approved one when I got the quotes. Will look now though - however if we change we have to pay £60 to the ground rent company.

Can you not use the legal cover to get advice? Most times there is a phone number you can call. It is in their interest to help after all "

I've spoken to the conveyancer who we used when we bought the house. She's only heard of this once before and wants the documents. Surely if its in the lease we should have been made aware.

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By *linky12Man
over a year ago

Bolton le Sands

You need to read the lease

You do not need to pay a solicitor to do it

Leaseholder beware when you buy

read the lease....

Dont fight battles which are un winnable.

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By (user no longer on site)
over a year ago


"Didn't know you had ground rent to pay? As that's usually just in relation to flats, rather than houses?

But you cannot legally be forced to use one provider - even with a mortgage, so long as you have buildings insurance to cover the rebuild cost you are fulfilling the obligations of the mortgage contract!"

Loads of houses are still lease hold usally 99 years (like mine) but your right you can't be forced to use a provider you don't want to use

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By (user no longer on site)
over a year ago

Tell them that what they are suggesting is illegal and threaten them with the ombudsman or a counter legal claim. That normally sees them off, if it doesn't then go to citizen advice find who the ombudsman is or counter claim yourself, you don't need a solicitor for things like this a little research and you local county court all help.

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By (user no longer on site)
over a year ago


"Is it a huge difference in price ?

Do you get the same amount of cover?

The cover I get is through my bank - I couldn't get a better quote with the cover (which includes pretty shit hot legal stuff and will cover my clarinet which is the biggy) I didn't look at the approved one when I got the quotes. Will look now though - however if we change we have to pay £60 to the ground rent company.

Can you not use the legal cover to get advice? Most times there is a phone number you can call. It is in their interest to help after all

I've spoken to the conveyancer who we used when we bought the house. She's only heard of this once before and wants the documents. Surely if its in the lease we should have been made aware. "
your right your solicitor should have seen this while doing there duty, but then again was it not just handed to an office junior to look over, and if she missed it then it's down to them to sort it out

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