Joint Freeholder Building Insurance: A Complete Guide

Joint Freeholder Building Insurance: A Complete Guide

When two or more people share ownership of the freehold of a building, arranging joint freeholder building insurance becomes a shared legal responsibility. Whether you jointly own the freehold of a converted house, a small block of flats, or a commercial building with residential units, understanding how insurance works in this arrangement is essential to protecting your investment and meeting your obligations to leaseholders.

What Is Joint Freeholder Building Insurance?

Joint freeholder building insurance is a buildings policy that covers a property where the freehold title is held by two or more individuals or companies together. Unlike a single-freeholder arrangement, all parties share responsibility for ensuring the building is adequately insured. The policy must cover the full reinstatement cost of the building — not its market value — and typically includes:

• The structure, roof, walls, floors, and permanent fixtures
• Communal areas, staircases, and shared facilities
• Property owners' liability (for injury or damage to third parties)
• Loss of rent cover during periods of repair following a claim
• Employers' liability if maintenance staff are employed
• Legal expenses cover

All joint freeholders should be named on the policy as insured parties to ensure each person's financial interest in the property is properly protected.

Who Is Responsible for Arranging Insurance in a Joint Freehold?

Under the Landlord and Tenant Act 1985, the freeholder is legally required to arrange adequate buildings insurance for any leasehold property. When there are joint freeholders, this obligation falls equally on all parties. In practice, you will need to agree how to manage this between yourselves:

One freeholder takes the lead. Often the simplest approach is for one joint freeholder to arrange and renew the policy each year, with costs split between all parties according to a written agreement.

A management company arranges cover. If you have formed a Residents' Management Company (RMC) or Right to Manage (RTM) company, it can arrange buildings insurance in the company's name, with costs recovered through the service charge.

A managing agent handles it. Many joint freeholders appoint a professional managing agent to oversee the property, including arranging insurance, collecting service charges, and handling maintenance.

Whatever structure you choose, leaseholders have the legal right to be informed of the insurer, the policy number, and the sum insured. You are required to provide this information on request under the Landlord and Tenant Act 1985.

Common Issues With Joint Freeholder Insurance Arrangements

Joint freeholder insurance can create practical challenges if not managed carefully. The most common issues are:

• Underinsurance: If the reinstatement value is set too low, any claim settlement may be reduced proportionally. A professional RICS rebuilding cost assessment every three to five years is strongly advisable.
• Cost-sharing disputes: Where freeholders own different proportions of the building, disagreements over how to split premiums can arise. Document the agreed arrangement in writing.
• Renewal friction: All named insured parties will typically need to agree on the insurer and terms at renewal. Poor communication between joint freeholders can lead to lapses in cover.
• Claims handling delays: Claims involving jointly owned property can be slower to resolve if multiple parties need to sign off on decisions. Nominating a single point of contact with the insurer at outset can help.

Getting the Right Cover for a Jointly Owned Freehold

Standard home insurance is not designed for jointly owned freehold properties. You need a specialist freeholder buildings insurance policy that accommodates multiple named insureds and addresses the risks associated with leasehold buildings. Working with an insurer who specialises in this area will ensure you get the right level of cover at a competitive price.

When obtaining quotes, you will typically need to provide: the names and details of all joint freeholders; the number and type of units in the building; the year of construction and building materials; the current professional rebuilding cost assessment; and details of any leaseholders and the lease terms.

Get a Fast Quote for Joint Freeholder Building Insurance

We specialise in buildings insurance for freeholders, including joint ownership arrangements. Our policies can accommodate multiple named insured parties. Get a FAST Quote today and ensure your jointly owned property is properly protected.