Building Insurance – Is it compulsory ?

Building Insurance – Is it compulsory ?

10:25 AM, 2nd June 2014, About 10 years ago 7

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I manage a couple of properties for a landlord who has a portfolio of about 12 in total, all mortgage free. He is very old school and when I went through his property form he told me he hasn’t got Building Insurance and thinks its a waste of money (until lighting strikes, or the gas explosion). Building Insurance - Is it compulsory

I have insurance with all of my properties and wouldn’t dream of not having this in place. Other than him just being stupid .. do you have to have buildings cover on a buy to let if there is no mortgage on it?

Thanks

Julie


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Comments

Mark Alexander - Founder of Property118

10:27 AM, 2nd June 2014, About 10 years ago

I think I would refuse to manage his properties for him if I were you on account of vicarious risks to your business.
.

Julie Dawson

12:56 PM, 2nd June 2014, About 10 years ago

Hi Mark ... could you elaborate on what risks you were thinking of ??

13:05 PM, 2nd June 2014, About 10 years ago

It is the Terms and Conditions of most mortgage offers that sufficient buildings insurance is in place.

However, as the properties are unencumbered, it is up to the individual whether they want to insure their assets or not.

I think it is extremely foolish of this landlord to take this stance.

Insurance is one of those things that its "better to have it and not need it, than to need it and not have it".

On top of that most landlord buildings insurances come with third party liability insurance which protects the landlord from claims such if a tenant dies in the property and it is deemed the landlords fault, or a workman is injured in the property or some such.

There was a recent case where a guest of the tenant had a child who fell down the stairs and was killed and I seem to recall that the landlord was sued for millions because the carpet was loose and the child tripped.

That is probably why Mark suggests that you should refuse to work with the landlord unless he takes out insurance.

The bottom line is that it is a COMPLETELY false economy not to imho.

Mark Alexander - Founder of Property118

13:54 PM, 2nd June 2014, About 10 years ago

Reply to the comment left by "Julie Dawson" at "02/06/2014 - 12:56":

Just suppose the worst occurred and a property burned down killing the tenants and those living next door. You can bet your bottom dollar that press and no win no fee lawyers will get involved somewhere along the line. The families of the tenants will doubtless want to seek compensation. One very awkward question for you might be "why did you not disclose to the tenants that the landlord didn't insure his properties?"

For more information about vicarious liability please see >>> http://en.wikipedia.org/wiki/Vicarious_liability
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Neil Patterson

8:41 AM, 3rd June 2014, About 10 years ago

It is unbelievable that it is not compulsory like car insurance.

It protects tenants and their welfare just as much as landlords.

Sally T

10:37 AM, 3rd June 2014, About 10 years ago

When a landlord signs up with an agent is there a clause that says they have to have insurance ? Do you ask for proof (most likely not)? What would stop them cancelling the policy as soon as they've signed up? The fact is until he told you you didn't know. If something happens and he is sued that's his problem.
Personally I wouldn't dream of been without insurance but it's down to the individual.

Neil Robb

11:05 AM, 7th June 2014, About 10 years ago

Hi

For the sake of a few hundred pounds per property I think he is taking a great risk. If the property was destroyed how much would it cost to repair. Rebuild.

Plus for the person who let the property how vulnerable are you if something goes wrong. Would you be liable.

I would convince him in this day and age he needs insurance or he might as well give all his possessions and property away. Because if anything goes wrong and he is sued and they win .

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