Question 1

Flood Risk

Accepted Answer

Q: Last year when our building insurance became due for renewal, we were met with an almost 100 per cent increase in the premium because all insurance providers had changed the rules about coastal properties and flood insurance. We took the decision as a committee that, because there are no flats on the ground floor, only car ports and garages, and the building had never been flooded in 43 years, we would not take the flood cover on offer at nearly £5000 additional premium. We have had a lot of support from the residents here, and absolutely no objections to it. It was minuted when the decision was made. The wording in the lease about the insurance says: “ That the lessor will at all times during the said term (unless such insurance shall be vitiated by any act or default of the lessee or occupier of any other flat comprised in the estate) insure and keep insured the building against loss or damage by fire and other such risks (if any) as the lessor thinks fit in some insurance office of repute in the full value thereof and whenever required etc” We have recently had people who are trying to buy these flats with mortgages, something which has only happened here on a very rare occasion, about two in the past and one of those being a buy to let. Could there be any repercussions from the solicitor who is dealing with the estate of a recently deceased leaseholder, or any other solicitor who may be dealing with buyers who wish to get a mortgage for whatever reason? One of these solicitors recently tried to change the insurance clause on the back of a deed of variation, but we were aware of what was going on and refused. We know we cannot change any clauses in the lease without 75 per cent agreement. FPRA Insurance Expert Belinda Thorpe replies: I would always recommend that when a decision is made that could affect any individual owner that 100 per cent agreement is obtained (in writing) to ensure that you have proof that everyone has understood and agrees. I would agree that flood cover is a fundamental part of their insurance policy, but I expect the decision may have been made based on affordability against perceived risk if the block has not flooded in 43 years. Any future purchasers will be made aware of the lack of flood cover by their conveyancing solicitor and then can make an informed decision on whether to proceed with their purchase. [Submitted February 2020]

Question 2

Flood Risk

Accepted Answer

Q: Last year when our building insurance became due for renewal, we were met with an almost 100 per cent increase in the premium because all insurance providers had changed the rules about coastal properties and flood insurance. We took the decision as a committee that, because there are no flats on the ground floor, only car ports and garages, and the building had never been flooded in 43 years, we would not take the flood cover on offer at nearly £5000 additional premium. We have had a lot of support from the residents here, and absolutely no objections to it. It was minuted when the decision was made. The wording in the lease about the insurance says: “ That the lessor will at all times during the said term (unless such insurance shall be vitiated by any act or default of the lessee or occupier of any other flat comprised in the estate) insure and keep insured the building against loss or damage by fire and other such risks (if any) as the lessor thinks fit in some insurance office of repute in the full value thereof and whenever required etc” We have recently had people who are trying to buy these flats with mortgages, something which has only happened here on a very rare occasion, about two in the past and one of those being a buy to let. Could there be any repercussions from the solicitor who is dealing with the estate of a recently deceased leaseholder, or any other solicitor who may be dealing with buyers who wish to get a mortgage for whatever reason? One of these solicitors recently tried to change the insurance clause on the back of a deed of variation, but we were aware of what was going on and refused. We know we cannot change any clauses in the lease without 75 per cent agreement. FPRA Insurance Expert Belinda Thorpe replies: I would always recommend that when a decision is made that could affect any individual owner that 100 per cent agreement is obtained (in writing) to ensure that you have proof that everyone has understood and agrees. I would agree that flood cover is a fundamental part of their insurance policy, but I expect the decision may have been made based on affordability against perceived risk if the block has not flooded in 43 years. Any future purchasers will be made aware of the lack of flood cover by their conveyancing solicitor and then can make an informed decision on whether to proceed with their purchase. [Submitted February 2020]

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