Building insurance may transfer to the RTM company depending on lease wording. Understanding insurance responsibilities, broker selection and premium transparency.
Check RTM EligibilityWhether building insurance transfers to the RTM company depends on the lease wording.
Some leases require the landlord to insure the building and recover the cost through the service charge. In these cases, insurance may remain with the landlord after RTM.
Other leases give management rights over insurance to whoever controls the building management. In these cases, insurance transfers to the RTM company.
Check the lease before assuming insurance transfers.
If insurance transfers to the RTM company, the RTM company can choose the insurance broker and policy.
This gives leaseholders control over broker selection, commission transparency and premium negotiations.
Many leaseholders claim RTM partly because of concerns about inflated insurance premiums or hidden broker commissions under the previous managing agent.
The RTM company should obtain competitive insurance quotes and disclose premiums and broker commissions clearly to leaseholders.
Transparency on insurance costs helps build leaseholder confidence in the RTM company's management.
Handover timing is critical for building insurance.
The RTM company must ensure there is no gap in insurance cover on the acquisition date.
If the landlord's policy does not transfer and the RTM company has not arranged cover, the building may be uninsured during the handover period.
Plan insurance arrangements before the acquisition date to avoid this risk.
RTM company directors may wish to consider directors and officers (D&O) insurance to protect against personal liability for company decisions.
This is separate from building insurance and is a commercial decision for the RTM company directors.
Use our free RTM eligibility checker to understand whether your building qualifies and get an indicative cost estimate.
Check Eligibility Now