Advice from Karen Bright, Partner at Bishop & Sewell.
It is often a requirement in a lease for the landlord to maintain a comprehensive building insurance policy. The lease will normally set out any minimum policy requirements. In addition to the requirements set out in your lease, if you have a mortgage on the property you will need to ensure that the policy meets with your lender’s requirements.
What can you do if the landlord has not provided you with information about the insurance policy?
A lessee has a statutory right to request its landlord to provide either
- a written summary of the policy,
- an opportunity to inspect and take copies of the policy or
- send copies or extracts from the insurance policy to the lessee. Such a request should be made in writing and the landlord must comply with the request within the period of 21 days beginning with the date on which it receives the notice.
The landlord is only required to provide the summary or copy of the insurance policy once in each insurance period. If the request is for the inspection of the policy, the landlord must provide reasonable access for inspection of the policy and any other relevant documents such as a receipt for payment. The landlord must also provide facilities for copying the insurance documents.
The provision of inspection and copying facilities can be regarded as a management cost and therefore may be recovered through the service charges provided there is a clause in the lease permitting this and those costs are reasonable. The cost of the insurance itself is also usually recoverable through the service charge and as such must also be reasonable.
If your landlord fails without reasonable excuse to comply with either a request for insurance details or to inspect or have copies of the relevant policy, then it commits a summary offence and may be liable for a fine of up to £2,500.
Under the legislation , where you are paying your landlord a service charge consisting of or including an amount payable directly or indirectly for insurance, you may notify the insurance company direct in writing about any damage to the property and a possible claim under the policy. When making a claim, you should provide a brief description of the nature of the damage. There is usually a period within which notice must be given to the insurer, which is specified in the insurance policy. Failure to do this within this time frame may result in the insurer refusing the claim.
Under the terms of some leases, the lessee may be required to insure the property with the insurance company nominated or approved by its landlord. If a dispute arises with the landlord in relation to the insurer nominated by it, a lessee may wish to apply to the court or the tribunal for a determination. The court or tribunal can make an order for the landlord to either nominate or approve another insurer as specified in the order or nominate or approve another insurer who satisfies the requirements as specified in the order.
Should you require further advice on any of the issues raised above, please contact Karen Bright of Bishop & Sewell LLP who would be happy to assist.
Karen Bright is a Partner at Bishop & Sewell LLP, Dispute Resolution Team. Tel: 020 7631 4141.
