Letting a listed property?
If you own a listed property – and there are some 374,000 in England alone, a third of which were built after 1800 – there are special implications for landlords' insurance policies.
As a general rule, you cannot demolish, alter or extend your building in any way which affects the character or setting without first contacting the conservation officer at your local district council for Listed Building Consent. Failure to obtain consent may result in a fine or even a term of imprisonment and the local authority can also force owners to restore the building to its former state. Importantly, such notices can also be enforced for works carried out by previous owners, so if a former breach only becomes apparent as the result of a fire, you could suddenly and unexpectedly find yourself paying for the alterations made by a predecessor.
One of the most important issues for landlords' insurance of a listed property is that the cost of rebuilding it is likely to be significantly higher than for a correspondingly sized ‘conventional' property.
This is because specific materials have to be used and these may be difficult – and expensive – to obtain.
The other issue is that, as indicated above, should any previous owners have undertaken unauthorised work, you will end up paying to have it made good. This could have a significant impact on the level of landlords' insurance required; clearly if the property is completely destroyed, then the sum insured needs to be adequate for rebuilding and the effect of any previous unauthorised work could prove irrelevant, in practice. However, most insurance losses are actually partial, rather than total, but if the sum insured is inadequate to cover the cost of a total rebuild, then the insurance company can cut back the amount it pays for the partial rebuilding work required. This makes what predecessors may have done to the property highly relevant.
Owners of listed property should always remember when considering insurance for landlords then, to ensure that their sum insured is adequate for the maximum total possible cost of rebuilding, using appropriate materials. They should also, with regard to loss of rent cover, note that the "indemnity period" (the maximum time for which the insurance company will cover your loss of rent) may have to be much longer than usual, due to the time required to obtain relevant permissions and specialist materials. Finally, they should make sure that if they have more expensive "contents" in the premises than might be considered normal, that they have additional contents cover.