Irrespective of any contractual provision relating to reinstatement, the insurer must reinstate if he is requested to do so by a person (other than the insured) who is interested in or otherwise entitled to the premises damaged by fire. This is the effect of the Fires Prevention (Metropolis) Act 1774, which was passed with a view to discouraging arson by insureds and providing a degree of protection to tenants. The Act does not apply to personal property and is effectively limited to reinstatement following fire. Despite its tide, the Act is applicable to the entirety of England and Wales. The Act does not provide a definition of “person interested” but the courts have held that this includes mortgagees, parties to a lease and a purchaser of a building following exchange of contracts but prior to completion of the conveyancing process. It is most often used by tenants. The insured is not entitled to give notice under this Act. This is perceived as being unfair when he is an insured person under the landlord’s insurance, e.g. as a tenant, but is nevertheless the law.

The insurer need not reinstate where the insured, within 60 days of the judgment of the loss, gives security for his undertaking to use the proceeds of the policy for the purposes of reinstatement, or where the destination of these proceeds has been agreed by the interested parties.

Where the reinstatement is faulty or delays in reinstatement cause loss to the insured, then the interested party may be entitled to damages providing the courts agree-in the absence of privity of contract-that there is the necessary proximity between the party and the insurer. If the insurer fails to meet the requirements of the Act, the interested party may obtain a mandatory injunction compelling him to reinstate, or a prohibitive injunction preventing payment of insurance monies to the insured. However, the insurer need not expend more money than the sum insured in the policy, or any other limits, e.g. if average is applicable