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Joshua
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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, I am the leaseholder of a flat that I rent out, the freeholder

Customer Question

Hi,
I am the leaseholder of a flat that I rent out, the freeholder landlord is asking me to pay 4x the normal insurance that I have been quoted by insurance companies, am I obliged to pay what ever they request.
Submitted: 2 years ago.
Category: Property Law
Expert:  Joshua replied 2 years ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience. May I ask from your research of the market is the policy significantly above normal market policy costs - I note you say it is 4 x the amount you have been quoted. Have you compared other quotes to get a feel for the market generally? Is your policy quote a like for like buildings policy?
Customer: replied 2 years ago.

Yes I hyave had other quotes none higher that £150.

including much more covered items.

Expert:  Joshua replied 2 years ago.
Thank you. Have you asked the landlord for an explanation of the fairly major discrepancy? Sometimes brokers offer landlords commission for taking out a particular policy for example
Customer: replied 2 years ago.

I have spoken to the landlord and he has insisted that this is 6% and my contribution to the policy payment. The landlord is insuring the block which consists of 5 flats an 5 shops, I really need to know where I stand legally as what he is proposing seems extortionate?

Expert:  Joshua replied 2 years ago.
thank you. Insurance is defined by section 18 of the Landlord and Tenant Act 1985 as a service charge. This is important because the legislation requires service charges to be reasonable and that the landlord cannot make a profit in relation to them. There is substantive case law in relation to insurance. The law provides that insurance need not be the cheapest available, but that it must be within the "market norm" and the landlord has a duty to review the market periodically to ensure his policy remains within the market norm.If the landlord recieves commission for the issue of the policy he is unlikely to be able to keep it.Authority for the above is Forcelux v Sweetman [2001], Havenridge Ltd v Boston Dyers Ltd [1994] and Williams v Southwark BC (2001). You have a right to request information relating to the policy to confirm the costs claimed are correct (albeit you dispute the amount) and that the landlord has not taken commission for the policy. In addition, you can put to the landlord your competing quotes you have obtained and asked that the landlord accounts for the fact that his policy appears to be several times what you consider to be the market norm for such a policy. You can refer the landlord to the above legislation and cases and ask that he reconsiders the policy in favour of policies within the market norm reminding him of his obligation to do so. If he refuses, you can propose mediation or you can refer the matter to a property tribunal who have the power to determin what is reasonable for the landlord to demand. if the landlord is demanding payment for a policy which is several times the market norm, the tribunal may order that the landlord is only able to recover a proportion of that policy equivalent to the cost of the market norm so the rest of the landlord is that he may be out of pocket if he is not reasonable in his demands.if necessary, you can make an application to the property Tribunal using the following form:http://www.lease-advice.org/documents/leasehold-03-eng.docI hope the above is of assistance? If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today or just reply back to let me know if the above is helpful. Your feedback is important to me. If there is anything else I can help with please reply back to me.
Expert:  Joshua replied 2 years ago.
Can I help you with anything else or has the above answered your questions satisfactorily? I would be pleased if you could drop me a brief note to let me know if the above was helpful.
Expert:  Joshua replied 2 years ago.
If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though