Question 1

Management Company Refuse to Claim on Buildings Insurance

Accepted Answer

Q: I am asking on behalf of one of the leaseholders in our RA. The leaseholder owns a first floor flat in a small block consisting of four flats and four ground floor commercial units. Below the flat owner is a restaurant. A leak has appeared in the ceiling of the restaurant that is in all likelihood due to a leak in the central heating/hot water pipes serving the leaseholder's flat. The management company/agent of the block refuse to claim on the building insurance for the leak. We, the leaseholders, pay for the building insurance through our service charge, but the policy is in the name of the management company and the insurance company will not deal with the claim without the approval of the management company. The management company's reasoning is that the pipework in individual flats is the leaseholder's own responsibility (this is true) and therefore not covered by the block buildings insurance (but this is not true - we have a copy of the insurance policy cover). The management company wants the leaseholder to pay privately for the repair and damage caused (in excess of £8,000) and also suggest that we should arrange our own buildings insurance cover. This, of course, is not possible - no one offers buildings insurance on a leasehold flat. I think the management company is wrong - I believe we are covered by the buildings insurance policy and the managing agents have other reasons (as in substantial financial rewards for no or low claims?) for not wishing to put through this claim. Is there anything we can do to force the management company to agree to put forward the claim? FPRA Hon Consultant and Insurance Expert Belinda Thorpe replies: Your member is absolutely correct, you cannot arrange individual buildings insurance policies for flats and the policy in place should cover both the individual units and the commercial properties below for incidents such as those described. If you can obtain a copy of the policy and schedule I could help confirm this to your member, and show where it confirms cover. [Submitted May 2017]

Question 2

Management Company Refuse to Claim on Buildings Insurance

Accepted Answer

Q: I am asking on behalf of one of the leaseholders in our RA. The leaseholder owns a first floor flat in a small block consisting of four flats and four ground floor commercial units. Below the flat owner is a restaurant. A leak has appeared in the ceiling of the restaurant that is in all likelihood due to a leak in the central heating/hot water pipes serving the leaseholder's flat. The management company/agent of the block refuse to claim on the building insurance for the leak. We, the leaseholders, pay for the building insurance through our service charge, but the policy is in the name of the management company and the insurance company will not deal with the claim without the approval of the management company. The management company's reasoning is that the pipework in individual flats is the leaseholder's own responsibility (this is true) and therefore not covered by the block buildings insurance (but this is not true - we have a copy of the insurance policy cover). The management company wants the leaseholder to pay privately for the repair and damage caused (in excess of £8,000) and also suggest that we should arrange our own buildings insurance cover. This, of course, is not possible - no one offers buildings insurance on a leasehold flat. I think the management company is wrong - I believe we are covered by the buildings insurance policy and the managing agents have other reasons (as in substantial financial rewards for no or low claims?) for not wishing to put through this claim. Is there anything we can do to force the management company to agree to put forward the claim? FPRA Hon Consultant and Insurance Expert Belinda Thorpe replies: Your member is absolutely correct, you cannot arrange individual buildings insurance policies for flats and the policy in place should cover both the individual units and the commercial properties below for incidents such as those described. If you can obtain a copy of the policy and schedule I could help confirm this to your member, and show where it confirms cover. [Submitted May 2017]

Management Company Refuse to Claim on Buildings Insurance

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