Buildings insurance for flats where the leaseholders also hold the freehold divides into two arrangements: a company the flat owners jointly own, or the individuals holding the freehold jointly. The insurance is the same in both; the difference is who the insured is and who is responsible for remembering to renew it.
A company holding the freehold
The company is the insured, with leaseholders' and mortgagees' interests noted. It can hold a bank account, collect contributions and be sued, which is why directors and officers cover for the flat owners who volunteered is worth its small premium. Companies House filings and the insurance renewal usually fall to the same person.
Individuals holding the freehold jointly
All of them are the insured, named on the policy. It works, and it is more fragile: a sale, a death or a falling out complicates everything, and there is no entity to hold money or documents. Where flats change hands often, converting to a company is usually worth the effort.
What does not change either way
The leases still govern the perils, the sum insured basis and the recovery of the premium. A professional reinstatement assessment is still the only reliable way to set the figure. And somebody still has to renew the policy on time, which is the single commonest failure in buildings with no managing agent.
Questions people ask about buildings insurance for flats with freehold
Who is the insured in a share of freehold building?
The company the flat owners jointly own, or the individuals where the freehold is held jointly, with leaseholders' and mortgagees' interests noted.
Do the leases still matter?
Yes. They govern the perils, the sum insured basis and the recovery of the premium until they are varied.
Should we set up a company?
Where flats change hands often, usually yes. A company survives sales and deaths and can hold money and documents.