Buildings Insurance

Telephone: 01792 315500 option 5

Buildings insurance – approved company

Where the lease or rent charge agreement states that you must insure your property with an approved insurer, we will specify a single insurance company. The company we currently approve is Zurich Insurance Company Ltd (“Zurich”). If you would like our in-house insurance broker, Compton Insurance Services Ltd, to arrange cover for you with Zurich, you can complete an application form online by clicking on this link. You can pay the full amount or pay by monthly instalment. If you pay by monthly instalment the payments are made to Orchard Finance who will charge interest on the payments.

Buildings insurance – our approach as landlord

Insurance can be contentious when we buy a new portfolio of ground rents or rent charges. When we ask for compliance with an insurance covenant, this can come as a surprise. Some of our thoughts on the issue are as follows.

When we buy a portfolio of ground rents or rent charges, we are buying a bundle of legal rights. Those rights are not limited just to collecting rent. As long as we operate within the confines of the law, we are entitled to exercise our rights.
When we buy a ground rent or rent charge, we are “buying into” an agreement (i.e. a lease or a rent charge agreement) which already exists. When that agreement was first entered (on one side by our predecessor in title and on the other by the original property owner) both parties were happy with the terms: similarly, subsequent buyers were happy with the terms when they bought; if they weren’t happy with the terms, why did they buy the property?
In some instances, we find that no buildings insurance cover is in place. If we weren’t involved, and the property were uninsured, the homeowner might risk losing his or her home entirely.

Every homeowner should have buildings insurance.

Buildings insurance – extenuating circumstances

We recognise that for some groups of people change is distressing. If you consider yourself to be vulnerable in some way, please write to us with your details. If we agree with your request, we will write back to you to confirm that we will waive any breach of the insurance covenant contained in the lease or rent charge agreement; there is no fee for this.

Buildings insurance – the law

The following is our understanding of the law. If you are in any doubt, please consult your own professional adviser or visit a Citizens Advice Bureau or equivalent entity.

The first place to start is the lease or rent charge agreement. You should read the wording of the document. We cannot unilaterally change what is written in the document. We have to keep to the covenants; equally, we expect you to keep to the covenants.

Where the document contains a covenant to insure in an insurance office to be approved by the landlord, the landlord has an absolute right to withhold approval without giving a reason (see the case of Tredegar v Harwood [1929] AC 72).

The effect of the Tredegar case is that we can approve whichever insurance company we choose, and we are not forced into approving any other company. Unless the lease or rent charge agreement states otherwise, we do not have to give reasons for refusing consent if you propose to arrange through another insurance company.

Over the years Parliament has brought in various statutes to limit landlords’ right to choose. You should seek legal or other professional advice if you wish to avail yourself of these statutory provisions. As far as we are aware, there is no statutory provision that applies to house owners bound by an insurance covenant contained in a rent charge agreement.