Commercial Landlord And Building Insurance

Commercial landlords typically have the responsibility of arranging building insurance, and any failure to fulfil this obligation can expose all parties involved to a significant risk of loss.

In the legal case of Monopro Limited v. Central Hall Developments Limited, a landlord who neglected this duty faced severe consequences for violating a High Court order.

The corporate landlord of a substantial Victorian civic building had agreed with its tenants to organise comprehensive building insurance. However, as the expiration date of the existing policy approached, the insurer demanded numerous safety upgrades to the premises before renewing the policy.

Despite this requirement, the landlord failed to secure new insurance. Subsequently, when the policy expired, one of the premises’ tenants had no option but to arrange alternative coverage at its own expense. In response, the tenant initiated legal proceedings, and the landlord formally committed to the court that it would fulfil its lease obligations and ensure the necessary insurance coverage by a specific date.

However, the landlord missed the deadline by over two months. As a result, the tenant pursued contempt proceedings. Shortly before the case hearing, the landlord finally secured insurance with insurers and admitted to breaching its commitments.

After examining their financial capabilities, the Court imposed fines of £3,750 each on the landlord and its sole director. Additionally, the director was cautioned that failure to pay would result in a six-week prison term.