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View Full Version : Buildings insurance - re-housing downstairs couple?



darrenr0
09-03-2009, 22:10 PM
Hi All

I'm after some Buildings insurance advise and hoped someone could help me!

OK here's the situation. I've owned the freehold on a 1st floor maisonette since 2003 and recently moved so I've just started renting it out. Downstairs lives a couple who have their own mortgage but are leasehold. I'm suppose to collect £10 ground rent from them every Jan 1st but don't bother, it makes me feel like a Scrooge straight after Christmas!

As the freeholder I understand it's my obligation to arrange insurance so for the last 6 years I've had my buildings insurance with Select & Protect and the downstairs couple were paying me half towards it.

However with me becoming a landlord recently I had to change my building insurance to a 'let' type so I renewed today with Direct Line 'Landlords' Buildings insurance.

So here my question...am I legally responsible for rehousing the downstairs couple if the worst came to the worst and the whole house burnt down (it was converted into two maisonettes in the 50's). I know that I would have to rehouse my upstairs tenants as they are paying me rent but what about the downstairs couple? They don't pay me any 'living' rent as such as they have their own mortgage but I have to arrange the building insurance on their behalf as I'm the freeholder.

Currently my new policy only covers me for £10,000 if I need to rehouse my upstairs tenant. However if it transpires I also need to rehouse the downstairs couple I seriously need to up the limit amount on my new policy.

I'm confused.com!?

Can anyone help me with this, thanks in advance!

Darren

PS Is it also up to me how much I wish to charge the downstairs couple in terms of their contribution towards this Building Insurance or am legally binded to charge them 50%?

specialist
10-03-2009, 09:18 AM
Hi
A policy typicaly should give 20% loss of rent/alternate accommodation so perhaps the one you bought is a bit lacking as they pay are share of the premium you are obligated to them

are direct line aware its half let half leased ?

jeffrey
10-03-2009, 23:41 PM
Is it also up to me how much I wish to charge the downstairs couple in terms of their contribution towards this Building Insurance or am legally binded to charge them 50%?
What do the leases say about this? You cannot unilaterally change them.

darrenr0
11-03-2009, 11:32 AM
I know I'm covered for re-housing but it's only £10,000 cover for a maximum of 12 months. This amounts to £833 a month which is enough to rehouse my renting tenant upstairs but not enough to rehouse the downstairs tenants as well!

I'm estimating it would take at least 12 months to rebuild a property in the event of a fire so I doubt very much that £10,000 is enough.

darrenr0
11-03-2009, 11:38 AM
Specialist - Yes Direct Line are aware that it's half let, half lease.

I know I'm covered for re-housing but it's only £10,000 cover for a maximum of 12 months. This amounts to £833 a month which is enough to rehouse my renting tenant upstairs but not enough to rehouse the downstairs tenants as well!

I'm estimating it would take at least 12 months to rebuild a property in the event of a fire so I doubt very much that £10,000 is enough.

Jeff - I need to check my lease again although on recollection it only uses the word 'contribute' and doesn't specify a percentage.

I've told Direct Line about this dilemma and I'm waiting on a reply...