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Section 164 (Insurance for Leasehold Houses)

Summary

1. This section gives Leaseholder of houses the right to take out their own buildings insurance, even if their Lease requires them to pay for insurance cover, so long as they meet certain requirements.

2. This right does not extend to Leasehold flats.

What must the Leaseholder of a house do in order to exercise this legal right?

1. Section 164 states that a Leaseholder is not required to use the Landlord’s choice of insurer as long as they do all the five following things:

i. Insure the house with an authorised insurer.

ii. Make sure the insurance policy protects the interests of both the Landlord and the Leaseholder.

iii. Ensure that the insurance policy taken covers the same risks as the policy offered by the Landlord’s preferred insurer.

iv. Ensure that the amount of the cover in the insurance policy is not less than the cover offered by the Landlord’s preferred insurer.

v. Send a Notice of Cover to the Landlord containing the correct information, at the right time, and to the right address

What is a Notice of Cover?

1. A Notice of Cover is a letter sent to the Landlord which includes the following information, and is written in the format prescribed in the relevant Regulations: currently The Leasehold Houses (Notice of Insurance Cover) (England) Regulations 2004.

2. The information to be included is:

i. The name of the Insurer the Leaseholder has used.

ii. A list of the risks covered by that insurance policy.

iii. The amount of cover under that insurance policy.

iv. Any other information required by the relevant regulations.

3. To view the prescribed format and content of the Notice of Cover follow the link.

4. Best practice in preparing a Notice of Cover is to type out the notice in the way shown in the Regulations, using exactly the same wording, and to fill in the ‘blanks’ where it indicates with the brackets that information should be inserted.

When must a Notice of Cover be Sent?

1. Section 164 states that are three points in time when a Leaseholder is required to send out the Notice of Cover:

i. No later than 14 days after a new insurance policy comes into effect.

ii. Within 14 days of renewing an existing policy.

iii. If there is a change in Freehold ownership of the Leasehold house, Notice of Cover must be sent within 14 days of a request from the new owner of the Freehold title.

Where must a Notice of Cover be Sent?

1. The Landlord’s address unless the Landlord has notified the Leaseholder of an alternative address in England or Wales where Notices should be sent.

2. The Landlord’s address is the last address of which the Leaseholder has been notified in writing.

3. If the Landlord has not notified the Leaseholder of an address to send Notices, either their address or an alternative address, the Leaseholder can send the Notice of  Cover to the address the Landlord is legally obliged to state on any demands for payment they send to the Leaseholder.

Click on the link to read more about the Commonhold and Leasehold Reform Act 2002