Insurance and leases

Who insures?

Where property is let, the landlord will usually be responsible for arranging insurance of the building, whilst recovering the cost of that insurance from the tenant(s). The landlord will clearly need to insure where the lease is of part only of a building, but even in the case of a lease of the whole of a single building the landlord may well prefer to retain control of the insurance so as to be sure that the building is fully covered at all times.

For further guidance, see Practice Note: Insurance issues for tenants — Who insures?.

Where the landlord insures, it is advisable to include specific tenant covenants:

•
against insuring the building (to avoid the risk of double insurance and the possible effect this might have on the recovery of insurance monies under the landlord's policy)
•
not to do, or fail to do, anything which would lead to the landlord's insurance becoming void or voidable

For further guidance, see Practice Note: Insurance—non-vitiation (non-invalidation) clauses.

Policies usually include a 'noted interest' clause which entitles tenants to be notified of any claim, or

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Property News

MHCLG publishes non-statutory guidance on HSRAs

The Ministry of Housing, Communities and Local Government (MHCLG) has published non-statutory guidance, providing a comprehensive overview of the application and implementation of High Street Rental Auctions (HSRAs), a new power introduced by the Levelling Up and Regeneration Act 2023. The guidance outlines the 22-24 week HSRA process, from initiation to completion, detailing the necessary steps, including the designation of eligible areas and meeting vacancy and local benefit conditions. It is intended for use by local authorities concerned about vacant commercial premises, commercial landlords and their lenders, businesses and community groups seeking commercial space, and commercial agents who may manage a HSRA on behalf of a local authority.

RICS announces updated Red Book Global Valuation Standards

The Royal Institution of Chartered Surveyors (RICS) has announced significant updates to its Valuation - Global Standards, known as the Red Book. The new edition, set to take effect on 31 January 2025, includes key upgrades such as: alignment with the latest International Valuation Standards; significant adaptations for fast developing areas such as technology and Environmental Social and Governance considerations; integration of new data on modelling and methods and a reformed format for Valuation Technical and Performance Standards.

MHCLG publishes Remediation Acceleration Plan to address unsafe cladding

The Ministry of Housing, Communities and Local Government (MHCLG) has published a new Remediation Acceleration Plan (RAP), aimed at expediting the removal of unsafe cladding in England, identifying all unsafe buildings, and supporting residents from the financial burdens of remediation. The plan sets key targets for 2029, including remediating all 18m+ buildings with unsafe cladding in government-funded schemes by 2029, and ensuring all 11m+ buildings are either remediated, have a completion date, or landlords face severe penalties. The RAP is supported by increased enforcement investment, which will increase the capacity of local authorities, fire and rescue authorities and the Building Safety Regulator (BSR) to manage hundreds of cases annually. The publication of the RAP coincides with a Parliamentary debate on the findings of the Grenfell Tower Inquiry’s final report. During the debate, it was announced that a continuous review process for statutory guidance to building regulations will be introduced, covering fire safety and building design by the BSR. In addition, there will be a review of how the Building Regulations guidance is produced, updated, and communicated to the construction industry.

DESNZ publishes consultation response on electricity networks land rights

The Department for Energy Security and Net Zero (DESNZ) has published the summary of responses to its August 2022 call for evidence on land rights and consents processes for electricity network infrastructure. The document outlines stakeholder feedback on several aspects of the current processes, including voluntary wayleaves, necessary wayleaves, and Section 37 consents. Key issues identified include delays, high costs, and inefficiencies in the existing system. In response, DESNZ established a Working Group to explore potential changes to land purchase and wayleave processes. Suggested improvements include introducing a Code of Practice, implementing alternative dispute resolution mechanisms, and standardising compensation rates. The government is now considering policy changes and intends to conduct further consultations as required, with the objective of facilitating the UK's ambition of achieving net zero power by 2030.