Hello all!
I bought a leasehold flat in a Victorian house conversion last year and share the freehold with the other 3 flats. We have block buildings insurance for the property as a whole and we split the cost equally, per our lease. The buildings insurance cost has been getting out of hand - last year was almost £6,000! It’s likely to be even more this year.
The insurance is high because the basement leaseholder made a six-figure claim for flooding in 2021, equivalent to approximately 35% of the flat’s value, compared to £50-65k claimed by other basements on the road for the same flood. The claim included compensation for lost rental profits while the flat was being restored.
I appreciate that insurance is there for emergencies like this, and the flood was out of anyone’s control so of course some level of claim needed to be made. However, it seems unreasonable to have made such a large claim, including for income, on a shared buildings policy. The other leaseholders were not consulted or informed about the claim before it was made and I question whether the amount was reasonable.
Our lease states that a leaseholder who does anything to increase the insurance premium is liable for the cost of the increase. This clause seems to suggest that the basement leaseholder is liable for the increase in insurance premium relating to the flood claim because they made a claim.
Is it unreasonable to expect one leaseholder to cover the cost of an increased premium resulting from a (huge, and possibly unreasonable) claim from a natural disaster?
I’d be very grateful for opinions from anyone who has been through something similar, or can empathise with how painfully expensive this is. 😩