Landlord has just sent a bill for 6 years insurance
Discussion
I bought a 125 lease of a shop in a block that has 6 other shops and 24 housing association flats above. The ground rent is £100 per year paid to the freeholder and they also insure the block.
They paid 25 grand for the block yet the yearly income is only £600 per year so doesn’t make sense however I was told by the auction house that he will make money by getting cash back from the insurance premium.
No idea if he does but the premium he charged doubled over the next 2 years.
Yesterday we received a demand for 6 years ground rent and insurance premium. I will pay the ground rent tomorrow however I want to know if he actually insured the block over those years as none of the shop owners have been billed.
Strange that he would absorb that cost.
Does he have to provide proof of the insurance
They paid 25 grand for the block yet the yearly income is only £600 per year so doesn’t make sense however I was told by the auction house that he will make money by getting cash back from the insurance premium.
No idea if he does but the premium he charged doubled over the next 2 years.
Yesterday we received a demand for 6 years ground rent and insurance premium. I will pay the ground rent tomorrow however I want to know if he actually insured the block over those years as none of the shop owners have been billed.
Strange that he would absorb that cost.
Does he have to provide proof of the insurance
It's down to the lease.
I let several commercial properties on full maintaining and insuring terms (where I source the insurance policy and invoice the tenant).
Checking a lease, there is a definition of this 'insurance rent'.
Here are some key words that feature in this particular lease:
the aggregate in each year
net cost of the premium after discount or commission
Therefore, under this lease, I don't believe that I could obtain 'cash back' without passing this on to the tenant, nor could I invoice 6 years at once.
The detail is in your lease. Have a read and maybe check with your solicitor, assuming you used one to procure the lease.
I let several commercial properties on full maintaining and insuring terms (where I source the insurance policy and invoice the tenant).
Checking a lease, there is a definition of this 'insurance rent'.
Here are some key words that feature in this particular lease:
the aggregate in each year
net cost of the premium after discount or commission
Therefore, under this lease, I don't believe that I could obtain 'cash back' without passing this on to the tenant, nor could I invoice 6 years at once.
The detail is in your lease. Have a read and maybe check with your solicitor, assuming you used one to procure the lease.
onedsla said:
It's down to the lease.
I let several commercial properties on full maintaining and insuring terms (where I source the insurance policy and invoice the tenant).
Checking a lease, there is a definition of this 'insurance rent'.
Here are some key words that feature in this particular lease:
the aggregate in each year
net cost of the premium after discount or commission
Therefore, under this lease, I don't believe that I could obtain 'cash back' without passing this on to the tenant, nor could I invoice 6 years at once.
The detail is in your lease. Have a read and maybe check with your solicitor, assuming you used one to procure the lease.
In general, unless "time is of the essence" then you can back-bill for those years. In just the same way that you can frequently go back many many years and action previously-ignored rent reviews.I let several commercial properties on full maintaining and insuring terms (where I source the insurance policy and invoice the tenant).
Checking a lease, there is a definition of this 'insurance rent'.
Here are some key words that feature in this particular lease:
the aggregate in each year
net cost of the premium after discount or commission
Therefore, under this lease, I don't believe that I could obtain 'cash back' without passing this on to the tenant, nor could I invoice 6 years at once.
The detail is in your lease. Have a read and maybe check with your solicitor, assuming you used one to procure the lease.
As a tenant, you should always try to ensure your landlord is required to provide competitive quotes each year, because otherwise there's no incentive to secure a decent deal (at best), or there's a strong incentive for the landlord to negotiate a "cashback" with the broker (at worst).
For the OP, proof of insurance for the period in question would be reasonable, yes. Make sure the request is in writing, of course.
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