Insurance for Blocks of Residential Flats

Blocks of Residential Apartments

Blocks of Residential Apartments do have special insurance needs. An off-the-shelf policy may not provide sufficient cover, and cutting corners on insurance can have consequences at a later date, creating extra work for you and certainly compromising your relationship with service charge payers.

As a specialist in buildings insurance for blocks of flats, Ferndale can negotiate policies specially tailored for your block of flats at competitive rates. As we work with a specialist panel of leading insurers, we are able to provide comprehensive cover at competitive premiums.

Our cover will typically include:-

·         Accidental loss and damage to buildings, outbuildings, paths and fences

·         Storm damage to hedges, gates and fences

·         Loss of metered water

·         Accidental damage and tree root damage to cables and underground services, including septic tanks

·         Costs incurred in tracing and accessing damages service pipes

·         Architects' and surveyors' fees during reinstatement

·         Loss of rent and alternative accommodation - including pets

·         Replacement locks following loss of keys

·         Gardening equipment

·         Damage to gardens caused by emergency services

·         Legal fees for removal of squatters

·         Removal of bees or wasps' nests

·         Cover for temporarily unoccupied flats

·         Contents of communal areas of the building, including carpets (not on all policies)

·         Property owners' liability

·         Employers' liability

·         Terrorism cover is available on request

Plus

·         Option to pay by monthly installments

·         Index-linked adjustment of sum insured

·         24-hour glass and lock replacement (on some policies only)

Leaseholders Right To Take on the Management of their Property

The Commonhold and Leasehold Reform Act 2002 gives a majority of Lessees the right to take over the management of their block of flats. (There are various exceptions where there is a resident landlord etc).

Essentially it allows Lessees to take over their managment using a special form of company (a Right to Manage Company - RTM) with a prescribed form of Memorandum and Articles of Assication. The RTM Company has the Lessees as its principal shareholders, but the landlord is also able to own a share. The company has a Board of Directors who are elected by the Members/Shareholders of the Company.

The RTM Company is responsible for carrying out all the landlord's obligations under the terms of the respective leases and is also liable to notify the Landlord of any breach of lease terms.

RTM needs to be approached with care and may not be suitable for all circumstances. Where leases do not have adequate provisions for payments on account of service charge or where there are several lessees with poor payment records, the Directors of the RTM Company could find themselves having to finance the running costs of the building. This could be substantial if major expenditure is due.

It is important to appreciate that the RTM Company will be taking on some very serious obligations of the Landlord. There may be extra costs relating to running the Company and we would advise the Directors to obtain "Directors and Officers Liability Insurance". If a professional Managing Agent is not engaged, the RTM Company should in our opinion also obtain "Professional Indemnity Insurance" to protect against negligence claims.

Directors and Officers Liability Insurance

Directors & Officers Liability Insurance

The most prudent Director/Officer can make decisions (in good faith) which prove later to be ill-judged or flawed. However, ignorance is no defence in UK law.

Directors and Officers of all companies, including Residential Management Companies, should be aware that they could potentially face unlimited personal liability without the kind of protection offered by this type of very affordable cover.

Although one typically holds one's position as a director or officer on a voluntary basis, for no benefit to yourself, the law recognises no difference between people running a Residents' Management Company and those running a large Public Company. Directors can be held personally liable for the consequences of their actions, errors and omissions.

Managing a building is a time consuming task, even with the assistance of professional property managers, and anyone prepared to put in the time and effort deserves a minimum of the reasonable protection afforded by this insurance.

What could go wrong?

·         A director could be held liable because the value of another lessee's flat had fallen due to the effects of a failure to identify and rectify external dilapidation.

·         A lessee might hold a director responsible for the poor workmanship of contractors paid for out of the service charge Fund.

·         A third party might sue as the result of a defamatory remark inadvertently made by someone in the capacity of director.

It could prove difficult or even impossible to recruit suitably skilled and experienced people as directors of a residents' management company because they are unwilling to accept the potential personal liability.

Cover is provided for breach of duty, trust or contract, neglectful, misleading statement, wrongful trading or wrongful acts or omissions.

What is covered?

·         Legal defence costs

·         Consequential loss

·         Damages awarded against a director

·         Out of Court settlements

·         Claimants costs and expenses

·         Legal advice

·         Legal representation

Is cover available where Ferndale does not currently arrange buildings insurance?

Yes, it certainly is. We can cover an individual property or large portfolios.

Engineering & Inspection Insurance

Engineering and Inspection Insurance

If you are responsible for managing a block of flats, you are required to ensure that any equipment such as lifts, boilers and window cleaning gantries are inspected regularly and are well maintained. Even where specific legislation does not apply, plant and equipment may be subject to Health & Safety guidance notes.

We can negotiate a single policy, written for your building, which will cover the costs of professional inspection of vulnerable equipment specified by you and then cover you for unforeseen breakdown.

What is covered?

• Sudden and unforeseen damage
• Breakdown, explosion and collapse
• Accidental damage
• Debris removal
• Temporary removal
• Claims preparation costs
• Avoidance of impending damage

Optional extensions:

• Own surrounding property for pressure plant
• Own surrounding property for lifting equipment

How much does the policy cost?
This will depend on what equipment is covered. We will negotiate a competitive price for the right insurance solution, tailored to provide the appropriate level of risk protection for your building.

By protecting all of the plant under a single policy, instead of taking out a different contract for each item, you can realise significant savings.

Remember that you will in any case have to arrange - and pay - for statutory inspections of lifts and boilers and that the costs of and arranging of these inspections would be included in your Ferndale engineering and inspection insurance.

Does all this legislation apply to residential flats?
YES! The Provision and Use of Work Equipment Regulations 1998 and the Lifting Operations and Lifting Equipment Regulations 1998 may have been written primarily with the workplace in mind, but blocks of flats, because they have common areas, fall under their remit.

The Gas Safety (Installation and Use) Regulations 1994 (as amended) place duties on consumers, installers, suppliers and landlords.

What do the inspectors do?
The engineer or surveyor carries out statutory and non-statutory examinations. In a block of flats statutory examinations typically cover lifts, window cleaning gantries, pressurised boiler systems, electronic installations etc.

Non-statutory examinations cover equipment not governed by specific UK or EU legislation (although it may be the subject of Health and Safety Executive guidance notes). E.g.: play equipment and swimming pool pumps.

After an examination is completed, clients receive a report detailing all the items of equipment and record their condition at the time of examination. The report identifies any defects and will make recommendations for refurbishment and maintenance.

Are the inspectors' recommendations mandatory?
Where legislation is concerned, the answer is obviously yes. In addition, your insurance cover will be invalid if you choose to ignore the inspector's recommendations.

Do I really need this cover?
Unless you are fully confident that your service charge budget can cover the costs of unplanned emergency repair work, we recommend that you consider this insurance. If the worst did happen, you might not find that flat owners have much patience if, say, the central heating boiler broke down in mid winter or the lift was out of order for days or weeks.

Lastly, do remember that directors of the management company could be held personally liable if equipment failure causes injury. Inspection and maintenance is essential

Services to Freehold Landlords

We recognise that Freehold Landlords, who are frequently commercial investors, require the expertise of a professional Insurance company who can offer advice on up to date requirements of ever-increasing statutory legislation.

Freeholders Information Request Form

Leaseholders Information Request Form

Services to Tenant Management Companies

Blocks of Residential Apartments

Blocks of Residential Apartments do have special insurance needs. An off-the-shelf policy may not provide sufficient cover, and cutting corners on insurance can have consequences at a later date, creating extra work for you and certainly compromising your relationship with service charge payers.   As a specialist in buildings insurance for blocks of flats, Ferndale can negotiate policies specially tailored for your block of flats at competitive rates. As we work with a specialist panel of leading insurers, we are able to provide comprehensive cover at competitive premiums.   Our cover will typically include: Accidental loss and damage to buildings, outbuildings, paths and fences Storm damage to hedges, gates and fences Loss of metered water Accidental damage and tree root damage to cables and underground services, including septic tanks Costs incurred in tracing and accessing damages service pipes Architects' and surveyors' fees during reinstatement Loss of rent and alternative accommodation - including pets Replacement locks following loss of keys Gardening equipment Damage to gardens caused by emergency services Legal fees for removal of squatters Removal of bees or wasps' nests Cover for temporarily unoccupied flats Contents of communal areas of the building, including carpets (not on all policies) Property owners' liability Employers' liability Terrorism cover is available on request Plus: Option to pay by monthly instalments Index-linked adjustment of sum insured 24-hour glass and lock replacement (on some policies only)

Tenants Information Request Form

Service for Developers

We are able to offer a specialised service for Developers of blocks of flats across the whole spectrum of development issues, covering new build to period conversions.

Developers Information Request Form