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Section 40 (Application to Vary Insurance Provisions for Houses)

Summary

1. This section states that any party to a Long Lease for any dwelling other than a flat may apply to a Court or a First Tier Tribunal to vary what a Lease says about insurance.

For what reasons can such an Application be made?

1. Section 40 says that an application can be made if the Lease fails to make “satisfactory provision” in any matter relating to the insurance of the property, including the recovery of the cost of the insurance from Leaseholders.

Can any Leaseholder make such an Application?

1. Section 40 specifically states that a Leaseholder cannot make an Application if:

i. The Lease is for three or more individual dwellings.

ii. The Leaseholder holds two or more leases of residential dwellings with the same Landlord.

iii. The Lease is for a flat.

Does Section 36 of the Landlord and Tenant Act 1987 apply to this type of Application?

1. Section 40 says that Section 36 also applies to an application to vary insurance provision.

2. This means that if one party to a Lease applies to vary insurance provisions under a particular Lease, any other party to a Lease with the same Landlord may also apply to a Court or Tribunal to vary other Leases under the same Landlord if they are affected by the same issue.

Does Section 38 of the Landlord and Tenant Act 1987 also apply to this type of Application?

1. Section 40 says that Section 38 also applies to an application to vary insurance provision.

2. This means that a Court or Tribunal has the power to make an Order to vary the terms of the lease in the manner specified in an Application under Section 40, or in any other manner it see fits.

3. It also means that a Court or Tribunal has the power to Order that one party compensate the other if it consider that by varying the terms of the Lease in respect of the provision of insurance one of the parties will experience a financial loss.

Relevant Case Law

See the section of our case law library on Applying to Vary the Terms of a Lease

Click on the link to read more about The Landlord and Tenant Act 1987