Having buildings insurance can protect you from large unexpected bills for major repairs.
This advice is for all owner occupiers and owner landlords of tenement buildings.
Your rights and obligations
It is often a condition of a mortgage that the borrower takes out sufficient insurance cover to rebuild the property should this become necessary and to ensure that owners will be able to pay off the cost of addressing other unforeseen emergencies such as where there is a defect in a common part of a building, for example, a burst rising cold main water pipe, addressing an outbreak of rot affecting more than one owner in the tenement.
Individual owners have a DUTY under the Tenement (Scotland) Act 2004 to ensure that they have sufficient cover to reinstate the building as a result of major events leading to demolition such as fire, subsidence or landslip.
A common insurance policy can be taken out by all owners in the building. This can be less expensive, but may be subject to the approval of your lender.
If you wish to protect the fixtures and fittings and valuables in your own home, you will need to take out separate home contents insurance.
Individual owners need to insure against leaking water from burst tanks, pipes and domestic appliances such as washing machines as you may receive a claim from a neighbour where the leak is coming from inside your flat.
You should also be aware that if not everyone in the common property has adequate insurance, you may not receive the full reinstatement costs. You therefore have a right under the Tenement (Scotland) Act to demand to know whether or not other residents within the tenement have adequate insurance cover.
REMEMBER: Reinstatement cost (the cost of rebuilding your property and those of your neighbours) may be greater than the market value of your current property.
The Tenement (Scotland) Act introduced a new override rule which means that even if your Title Deeds do not specify that you must have insurance, the law says that you must have insurance protection against the following risks: