If you live in a flat, maisonette or self-contained housing unit, tailored flat insurance can provide comprehensive cover for your home. Read on to work out your freehold from your leasehold and let us explain what your obligations are as a tenant or homeowner.
Leasehold
Today, most flats and apartments are sold on a leasehold basis and if you purchased your flat on a leasehold basis, this means that you have the right to live in or use the property for the terms of the lease, generally for a fixed period of time (typically 99 or 125 years) for the price you agreed. You don’t actually own the property and at the end of the lease term the property is retained by the owner. You may be liable to pay ground rent, an annual service charge (for repairs and maintenance and any other management costs) and there may also be restrictions on what you can do with your property, communal guidelines regarding noise level and specific responsibilities regarding insurance. Generally, leasehold buildings insurance will be covered by the landlord, although you will be fully responsible for your own contents insurance.
Freehold
Freehold means that the buyer has complete ownership of the land and buildings on it. The majority of housing in the UK is owned on a freehold basis and, unlike leasehold, there is no time limit on the rights of the owner.
Buying Flat Insurance
Here are a few pointers that could prove useful when looking for flat insurnace:
1. Check that the building itself is covered by the landlord. If not, then make sure you have adequate buildings and contents cover.
2. Is the flat constructed from brick? Many older self-contained properties are not of standard construction and this may affect the quotations you receive.
3. If you rent your flat, look for tailored tenant insurance policies, which can cover you for accidental damage, new for old replacements and cover for items away from the home.
4. What happens if the flat next door or a couple a floors above is destroyed by fire? Where does this leave you? Read the small print and check your liabilities.
Read our home insurance articles and guides for more great topics or get a home insurance quote.