Leaseholder Building Insurance Policy

Overview

Reading Borough Council (RBC) is seeking to procure a Third-Party Property Insurance Policy for leasehold residential properties where the Council retains the freehold interest, primarily properties sold under the Right to Buy (RTB) scheme. This will be a new standalone contract and will establish a long-term insurance arrangement to ensure that leaseholders have access to appropriate buildings insurance cover in accordance with the Council's obligations as freeholder and landlord. The requirement covers: • 229 leasehold properties sold under the Right to Buy scheme. • 13 Shared Ownership houses. • 1 mortgaged property at St Elizabeth Close. • 16 detached garages leased to RTB leaseholders. The property portfolio consists predominantly of flats within blocks and maisonettes where the Council retains the freehold ownership. In many cases, the lease agreement requires the Council, as Freeholder, to arrange buildings insurance on behalf of leaseholders and recover the associated premium through the service charge mechanism. Properties remaining within the Council's housing stock are covered separately and are excluded from this procurement. A detailed property schedule has been prepared and includes information such as construction type, age of property, number of storeys and tenancy/subletting details where available. The procurement is required to ensure that the Council continues to meet its legal and contractual obligations as freeholder by arranging suitable buildings insurance cover for leaseholders where required under the terms of the lease. The contract will: • Provide appropriate third-party Property insurance protection for leasehold properties where the Council retains the freehold. • Mitigate potential financial exposure arising from claims against the Council as freeholder. • Ensure compliance with lease obligations and landlord responsibilities where insurance arrangements are required. • Provide a transparent and consistent insurance arrangement for affected leaseholders. • Support effective risk management across the Council's housing portfolio. As the proposed contract constitutes a Qualifying Long-Term Agreement (QLTA), the Council is required to consult affected leaseholders in accordance with Section 20 of the Landlord and Tenant Act 1985 prior to entering into the agreement.