Long leaseholders: building insurance requirements
This House of Commons Library briefing paper explains long leaseholders' rights in relation to buildings insurance and summarises a Westminster Hall debate on the issue (October 2014) and the findings of a study carried out by the Competition and Markets Authority, also in 2014.
Responsibility for arranging building insurance for flats/houses owned on a long leasehold basis, along with the charges levied for this insurance, can often give rise to disputes. Leaseholders can resent the requirement to insure with a company nominated by the landlord as they feel it interferes with their ability to obtain the best terms available. A further issue has arisen in relation to the inclusion of cover against terrorism in building insurance arrangements.
Leaseholders do have rights to challenge the standard of cover and charges they believe to be unreasonable. Changes introduced by the Commonhold and Leasehold Reform Act 2002 gave additional rights to long leaseholders of houses in respect of buildings insurance.
Leasehold building insurance arrangements were the subject of a Westminster Hall debate on 22 October 2014 and the Competition and Markets Authority (CMA) considered buildings insurance as part of its 2014 market study into the residential property management services sector in England and Wales. As a result of this work, the CMA encouraged the Financial Conduct Authority and the Government to consider regulation in this area. The Government has not indicated an intention to proceed with regulation.
The Leasehold Advisory Service publishes a number of helpful advice guides on a range of issues for long leaseholders.