A leaseholder that read my book The Survivor's Guide To Buying A Freehold has asked this question:
"I own a flat in a Victorian semi-detached building with three flats. The three leaseholders collectively own the building freehold. Do we need jointly to insure the whole building – or can each flat take out a separate insurance policy for his/her one-third of the building?"
The answer is that most residential blocks of flats or houses that have been converted into flats have leases that require the freeholder (ie- the landlord) to take out building insurance. Building insurance is one insurance policy that covers the entire building, including the roof. This is different from "contents insurance", which is insurance covering just the items inside your home. Contents insurance is taken out by an individual homeowner, whether the property is a flat or a house. But it's the responsibility of the owner of the building, the freeholder, to take out building insurance.
It is the obligation of the freeholder to insure the building -- even if the freeholder is a company jointly owned by leaseholders of individual flats. None of the individual leaseholders has this responsibility, even if they are shareholders (ie- owners) of the freehold company.
There are insurance brokers that specialise in providing building insurance for residential blocks of flats.
By the way, if the lease of your flat does not identify the freeholder as the person/entity legally responsible for insuring the building, then you have a defective lease and you need to get your lease changed.
At Rosetta Consulting Ltd (www.rosettaconsulting.com) I receive many questions every week from leaseholders about how best to manage their block of flats after they have bought their freehold. If you have a question on this subject or any other leasehold/freehold question, feel free to post it on this blog. Your question might help others!
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