Insurance Costs - Are They Reasonable
Submitted On 2011-08-03
Right To Manage Info will explore the conflict of interest that occurs when the freeholder or managing agent arranges the various types of Insurance that they arrange including buildings, directors and lift insurances.
At times, the freeholder or managing agent can charge an excessive amount for these insurance. This is largely due to the commission negotiated with the Insurance provider. In many cases, the freeholder does not own the flats, so they are free to negotiate the Insurance commission in their favour. Percentages can vary but typically range from 7.5% to 25%.
The freeholder or managing agent has a duty to insure the building, usually as per the terms of the lease. Legally there is no requirement to shop around for the best deal unless the lease specifically obliges them to do so, which is rare in our experience.
There are freeholders and managing agents that can actually save you money in this area. For instance, your agent may insure 100+ buildings on one Insurance block policy. This is a great deal of buying power and quite often the agent can negotiate a low premium on your behalf, despite a commission being earned by the agent.
If you want to compare prices, find out the Sum Insured from the Insurance Certificate and get a comparative price. Your freeholder or agent may look at this price.
Insurance forms a large part of your annual expenditure for the building, it could be worth taking a look to help manage your money! If you are unsure please do get in touch or you can contact the Leasehold Advisory Service.
You can use your rights under The Common hold and Leasehold Reform Act 2002, you can take over the the Right to Manage of your building, and you may be surprised how much money you can save.
To know more about Right to Manage London, visit us now at http://righttomanageinfo.co.uk/.
Right to Manage London, Right to Manage
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