The government has now passed a new Water Bill, which among other issues covered its flood insurance scheme Flood Re.
It appears from the outset DEFRA had worked with the Association of British Insurers (ABI) to define how this cover would work.
Early into the process the ABI persuaded DEFRA leasehold properties should be excluded from this flood reinsurance scheme designed to ensure all residential properties would be able to obtain affordable cover.
The ABI assured DEFRA that leasehold properties were not a problem and that they would still be able to get cover at commercial rates.
By the time the sector became aware of the plans it was perhaps already too late.
In rare unanimity, LKP has been working with the British Property Federation, ARMA, the Council of Mortgage Lenders and others such as RICS, BIBA (British Insurance Brokers Association), FPRA and RLA to raise issues with the government.
Eventually DEFRA Minister Dan Rodgerson (LibDem) agreed to a meeting where he was told that the DEFRA position was wrong: it being based on no robust data or even a basic understanding of how large the residential leasehold is.
All parties except the ABI told the minister that the system may not work and that some leasehold sites could find a problem obtaining flood cover this year.
Rodgerson was not even properly briefed about the landlords’ commercial interest in the insurance of a leasehold block.
He did not seem to know that leaseholders pay 100 per cent of the insurance.
Maybe the ABI did not want to let the minister know in real life some of their members sometimes pass on a very dodgy commission to the landlord which is not meant to happen.
As a mark in the sand, the British Property Federation has now written to DEFRA outlining the support from LKP and others. If it turns out flood insurance is a problem it will be for DEFRA to get out of the mess.
The BPF statement on Flood Re can be read here:
DEFRA Flood Reinsurance regulations
Related posts:
LKP urges minister to include leaseholders in Flood Re insurance plan
Survey on leasehold flood insurance
Leasehold owners excluded from government’s flood insurance plan, Flood Re
Leasehold flood risks and how to make 4.1 million homes disappear …
Daily Express reports Leasehold Knowledge Partnership involvement in Flood Re
Law Commission likely to end the exit and sublet fee payola
The Leaseholders are treated as a second class citizens. Not to mention them just pretend we don’t exist. Carry on ripping off.
Why it is that the Lease extensions has not been investigated? There is a statutory formula to calculate the premium however Proxima (Estates & Management) “are not in a position to divulge a breakdown of the costs or calculations, due to commercial reasons”. Yet the prices are from £6K up to £20K for identical properties in the same Estate plus figures for a smaller properties according to their “calculations” are grossly excessive. The procedure can take 8 months an over. They are changing the lease terms as they wish adding ” a cost recovery clause” etc. The Leaseholders are totally under their power, we been “messed up” etc.
Surely this practise must be stopped ie “marriage value” a 120 years Lease is not for 120 years at all but the Lease extension must be purchased well before it falls down to 80years.
We don’t own anything just a Lease to live miserable life like prisoners, apply and pay for consents (sometimes even this has been made very difficult and stressful) for cats, dogs, bathrooms, windows etc and we pay for everything even if one is brave enough to take “them” to court we the Leaseholders are the paying cash cows even pay their court fees.
Not to mention “The so called Customer charter” ie a communal hall carpet ripped off not replaced for months, some communal lights off over a year etc. The reality off the Leasehold living in the 21st century yet the majority of residents don’t take any action and the Landlords/Freeholders carry on no worries and are Law to themselves !
It is already having an effect with a couple of schemes seeing buyers drop out as no assurance can be given to them about whether flood cover or huge excesses will not be in place in future years.
One RMC freehold scheme is already thinking hard about flood defences and taking counsels advice on recovery of costs of measures in the service charge, after barely winning the battle last year with sandbags.
They are not alone I am sure.
One of the points raised by CML during our meetings was that for some mortgage lenders policies on excesses could be a major issue if cover becomes difficult. A number have a maximum excess limit of £1000
Leaseholders in a block which have problems with flood or other sorts of cover should check this page on the CML web site for the maximum excess level allowed under their mortgages.
http://www.cml.org.uk/cml/handbook/englandandwales/question-list/614
Our development at Ashbrook Court had a leaking WC in the House Managers Flat which had an Excess of £500 and the damaged Carpets caused by the leak of water also had an Excess of £500.
The Area Manager refused to accept that this was caused by a Small Water Leak, so he based the claim on Storm Damage, so they would not have to make a claim against their Sister Company?
The Area Manager stated that the two damaged items, WC and Carpets could not be made on one claim?
Chas,
Perhaps the lightening that struck your obselete warden call system (which became in good condition for the purpose of an insurance claim) also struck the “U” bend?
Was it the case that around this time that insurance companies changed the calculations for rebates to Kingsborough/ Peverel to take into account the number and amount of claims?
Michael,
You could be correct, as when I finally received the Invoice File, I found the name and phone number of the contractor who replaced the WC.
The contractor informed me that the (6 inch) flush pipe had become dislodged and had moved. The WC and Cistern were connected by a Glazed small section, below the cistern and pan, which was repairable, but required the removal of the Glazed Section, which was fixed with adjustable screws that needed releasing, as they had rusted. He informed me that the works to repair would have taken less than an hour and cost £90.00.
The contractor then informed me that he had been instructed, simply to replace the complete WC System and send the bill to the House Manager who would OK it?
This WC and Cistern was replaced and then a separate contractor replaced the carpets.
The total cost of £702.00 ,which we paid out of Service Charges, and yet no claim was to be accepted, as the both items had an access of £500 each???
Although the leaking WC caused the damage to the carpets, they were not allowed as one claim (Any Comments) by our Area Manager.
To this day our Area Manager refuses to provide any of the paperwork that he had used, as would be expected from a professional, who I believe, just phoned the contractor and asked them to replace, both items.
A professional would have ensured that he/she had the paper trail to show if asked for or required?
I have been sent the claims made during this period by Judi Runciman of Kingsborough and it fails to show, any claim made during this period for a water leak (replaced WC) and replacement of carpets to the bathroom, hall, stairs and landing?
This is how Peverel Retirement were allowed to manage by the Regional Managers who were in collusion over insurance claims?
Peverel Retirement looked on the developments as cash cows to milk as and when necessary?
Chas,
I am not sure i would like to follow the paper trail for your toilet, nor would i care to speculate on what caused the screws to rust (especially over breakfast!)
Since i presume Area Managers are not trained plumbers, it is rather strange for an untrained person to decide on what was needed to rectify a problem, rather than a suitably qualified individual.
The extra money that has been taken from your service charges should be refunded.
In my experience, communal buildings insurance doesn’t cover the cost of repairing faulty fixtures, but may cover the cost of locating the fault, if it’s not obvious.
Also, wouldn’t a separate contents policy be needed for the carpets?
Ros,
The leaking WC and the damaged carpets were in the bathroom of the House Manager Flat.
Our Area Manager made no attempt to inform us, as he was not obliged too. He can spend up to £7,000.00 without any notification as the S20 allows for £250 per household can be spent by the Area Manage without consultation, (his words)
The only way we found out about the replacement WC and Carpets was some 20 months later at a Budget Meeting. When asked at the meeting in 2008/09, our Area Manager stated that neither item was covered by any insurance and was paid out of Service Charges. The Area Manager was asked to check why the items were not covered by any Insurance. On a later visit and following many calls the Area Manager finally agreed that they were both covered, but the WC and Carpets each had a £500.00 excess?
OPEN AND TRANSPARENT, not two words that are readily linked to Peverel Retirement.
The carpets in the flat could only have been replaced under a contents insurance policy, not a buildings insurance policy (with a resulting £500 contents excess to be paid).
Assuming that the buildings insurance policy did cover repair of the toilet, either repair or replacement would have cost much less than the £500 buildings insurance excess. You can get complete toilet systems at a pretty reasonable cost. Wickes do one for £48.
Rather than pay 2 x £500 excess, it was presumably cheaper just to pay the actual total cost of toilet and carpet replacement directly to the contractors.
Ros,
The £500 excess was on the Building Insurance Cover for the whole development of 29 flats.
The cover was as seen on the Certificate of Insurance:-
Subsidence £500 (Excess)
Storm, Flood and Water Damage £500 (Excess)
All other claims £250 (Excess)
The damaged WC was covered by the All other claims with an Excess of £250 not surly the same as Subsidence or Storm, Flood and Water Damage.
I agree, there should have been a Contents Cover taken out by our House Manager. If this cover was available, then the Excess would have only been £100, not £500.
Are you agreeing that the WC damage and the Carpet damaged are two separate claims and can not be combined as the broken WC caused the escape of water?
Are you really also saying, that the residents paid the £702 because it was cheaper than the two Excesses which were placed in the wrong cover?
The WC and Carpets were in the House Managers Flat, the damage was caused by the inhabitants of the Flat.
The replacements were undertaken 15 months, before we were informed what had occurred.
No Paper Trail Exists as no Claim was ever made, this is how Peverel Retirement Area Managers, benefitted by there being no claims.