Q&A - Buildings Insurance 

ANSWER

By acquiring the right to manage, as the right to manage company you effectively “step into the shoes” of your landlord in relation to their management functions under the leases.

The management functions which your landlord had under the leases are now, instead, functions of the RTM Company.

Management functions are functions with respect to services, repairs, maintenance, improvements, insurance and management.

Therefore, the placing of insurance is one of the functions that you, as RTM Company, have acquired.

Therefore, the RTM Company is now obliged to place insurance for the residential units.

As RTM Company you have no jurisdiction, however, over the commercial units.

Unless you specifically agree with your landlord that he can place insurance for the residential units, the ability to do so rests with the RTM Company.

Cassandra Zanelli, Partner Taylor&Emmet LLP

Having exercised the RTM of your building, the RTM Company is now able to undertake all the management functions of the freeholder that are contained in the residential leases.  Provided that it is the responsibility of the freeholder to insure the building under your residential leases then the RTM Company will now be able to arrange for insurance to be put in place.

However, the RTM Company does not have control over the management of the commercial premises and this will remain the responsibility of the freeholder.  Unfortunately, the legislation does not provide any assistance when dealing with any disputes arising from this point”

Louise Uphill, Piper Smith Watton LLP