Issue - meetings

Report of Corporate Director for Growth and City Development

Kim Smith, Leasehold Manager, presented the report and stated the following:

a.  Nottingham City Council (NCC) Housing Services need to procure a new contract for  Building Insurance as the current contract is due to expire on 31 March 2025.

b.  NCC are, under the terms of a lease agreement, responsible for arranging Building Insurance cover for Residential Leasehold flats citywide as Residential Lease Agreements contain an explicit clause that make it mandatory for the council to provide Building Insurance.

c.  The Leaseholder agrees to pay a contribution to the landlord costs under the terms of the lease for providing Building Insurance, and the council pay the premium in advance and recharge Leaseholders within their annual Service Charge Accounts.

Resolved to

(1)  approve tendering for Leasehold Building Insurance for residential leasehold flats held on a long lease, on a 3+1+1-year contract at a total cost of up to £1.5m;

(2)  delegate authority to the Insurance and Risk Manager to place insurance cover with the insurer that provides best value on conclusion of the tender process.

Reasons for recommendations

d.  There is a legal requirement to tender for the leasehold building insurance policy.  It is the intention of the Leasehold Manager, Kim Smith, and Insurance Risk Manager, Jackie Handley, to enter a contract for Leasehold Building Insurance for a period of 5 years on a 3+1+1 contract.

e.  NCC Housing Services Leasehold and Insurance Risk Department need to procure for a new contract for a Building Insurance as the current contract is due to expire on 31 March 2025. NCC are, under the terms of a lease agreement, responsible for arranging Building Insurance cover for Residential Leasehold flats citywide. NCC Residential Lease Agreements contain an explicit clause that make it mandatory for NCC to provide Building Insurance.

f.  The Leaseholder agrees to pay a contribution to the landlord costs under the terms of the lease for providing Building Insurance.

g.  NCC pay the premium in advance and recharge Leaseholders within their annual Service Charge Accounts.

h.  A full procurement exercise is required to ensure NCC are legally compliant, to evidence that best value has been achieved for leaseholders and to ensure we are able to recover the insurance premium from Leaseholders as per the lease agreement.

i.  NCC are required to satisfy the Leasehold Section 20 Consultation Requirements in accordance with Section 20 of the Landlord and Tenant Act 1985 and The Service Charges (Consultation Requirements) (England) Regulations 2003.

j.  Due to the value of the overall contract public advertisement is required and a 60 day consultation period with its leaseholders. We therefore need to commence the procurement exercise in November to ensure there is sufficient time for consultation, the tender and placing of the insurance policy.

k.  To estimate the total contract value, an assumed inflation rate of 5% has been applied to the sums insured in 2024-2025, This was £115,105,160.35.

l.  It is also assumed that we are honoured the same rates for the duration of the contract, and it  ...  view the full minutes text for item 49