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I'm considering buying a home in Scotland for cash, with no mortgage. The home is an apartment. The property is freehold, which means it's outright ownership with no leasehold or anything like that. Because it's in a block of low rise flats, maintenance is shared and that's fine, I'm more than happy to pay my share of the maintenance.

The issue is that the block is maintained but not owned by a Scottish council.

One of the burdens for purchasing the property is that each homeowner must have building insurance. This is in addition to the maintenance. Now my experience of insurance is that it's that it's an economic grift, and the only service that you never get the service you pay for, and you can't get a refund on it, insurance claims are extremely difficult to claim back, and insurance companies will do literally anything to avoid paying out. For this reason, and the fact that they could raise the insurance to whatever they want means i'd prefer not to have insurance.

If one were to stop paying insurance, is there anything that can be done to enforce this? And in what form would enforcement take?

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    In my experience buildings & contents insurance is pretty reliable, especially if you pick a reputable insurer (based on reviews of people who have needed to use it). For starts it's highly regulated. If anything is structurally wrong with the property there's barely a way for the insurer to try and get out of it. If it's contents it can get a bit iffy, as in the case of fire or theft the insurer will want to be reasonably confident that you owned the things you are claiming on (and only up to the value for which you are insured), so may ask for receipts etc which can be hard to produce.
    – James T
    Commented Dec 11, 2023 at 11:32
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    @alexg's answer is good on the legal perspective; but as a practical matter: have you checked that you actually require buildings insurance? In some (many?) cases, the common maintenance charges you pay to the factor (maintainer) include buildings insurance as a matter of course
    – bertieb
    Commented Dec 11, 2023 at 13:52
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    Insurance should, in general, be a small loss. It's the protection against catastrophic loss that you are protecting yourself against. Commented Dec 11, 2023 at 20:28

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You actually have a statutory duty to have insurance when you own one of the flats in a tenement. It's possible that the title condition goes beyond this requirement in some way, but there is still a minimum level of coverage. This is in the Tenements (Scotland) Act 2004, s.18. It says (together with a statutory instrument outlining specific risks, such as fire) that you need insurance coverage for the reinstatement value of your property and any associated parts of the building (the "pertinent"). The title deed may specify the allocation of common parts to different owners, and there are fallback rules in section 3 of the Act to make sure that everything is the responsibility of somebody.

The owners of other flats can ask you for proof of insurance, and you have 14 days to comply. If you do not, then they could take you to court, and the court could order you to get the insurance. As described in the Act, compliance is not required if the cost of insurance would be "unreasonably high", or if it's unobtainable after "reasonable efforts". But in a situation where other owners have been able to obtain insurance, and you could afford it in principle, the reasonableness standard could be hard to refute. Violating the court order means that the consequences escalate. Legal expenses can quickly outpace the cost of just getting the insurance.

Sometimes, flat owners club together to obtain a single insurance policy for the building. (Naturally, everybody then has to bear their share of the cost.) This can be fiddly to arrange because of the coordination involved, and the interaction with other people's existing insurance - such as policies they have because of a mortgage, or to cover the contents of their properties rather than just the structure. The way this works also depends on the mechanisms in place for common decision-making; there's a scheme in the Tenements Act which can be followed if the deeds don't already specify.

As mentioned, the deed of conditions might go beyond this regime in some way, for example by giving the council the power to request proof of insurance. Enforcement of a title condition works in the same way as the statutory condition. In the case of building insurance, any of the other owners could bring a court action, because they have an interest in the fabric of the building being maintained. Generally, title conditions can be varied either by agreement, or as a result of an adversarial court process (in the Lands Tribunal). Either way of proceeding would end up involving the other flat owners as well as the council, and would entail instructing a solicitor.

I assume a solicitor is already involved in your proposed purchase. They would be able to give more specific advice if there is something objectionable in the deed; the condition in the Tenements Act is not negotiable.

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  • I believe in the US there is some leeway for forming a trust to set aside a large enough sum of your own money to act as your own insurance policy, instead of purchasing one on the market. Does Scotland have a similar provision in it's law? Notably doing this requires quite a hefty investment compared to just purchasing insurance, and can be as much as rebuilding your portion of the flat entirely in the case of catastrophic damages. Commented Dec 11, 2023 at 17:36
  • I've only encountered self-insurance in the context of commercial property (or the government, but that's a special case). It's possible that a wealthy individual could set something like that up.
    – alexg
    Commented Dec 12, 2023 at 11:18
  • Yes, it's not usually recommended here, as it can lock a large amount of capital into nonliquidity for the entire time you own a residence. I was just curious if it was available there, and what the requirements would be as the asker said that they would be purchasing the flat in cash. It might have been an option for them. Commented Dec 12, 2023 at 17:44
  • Thank you, that's a very well researched and informative reply. What interested me about the whole situation was that when i bought this place (another apartment), there were no such burders, despite being bought after 2004, which made be suspicious as to why there was a disparity. I've gone ahead with the purchase, and I got my keys last week. I have insurance quotes and for now they seem perfectly reasonable. In my financial situation if it was just my property, i'd rather just buy another place if it burnt down (say). So yes, very useful answer thanks again!
    – Owl
    Commented Dec 29, 2023 at 2:49

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