Transparency and Fairness for Flat Owners
Don’t let block owning landlords and their insurance brokers rake off secret commissions from the insurance premiums you pay.
Many leaseholders in blocks of flats have unknowingly been victims of an unfair practice where their landlords, in collaboration with insurance brokers, have shared undisclosed commissions on insurance payments.
There is evidence that the practice has been going on since at least 1997.
Essentially, insurance brokers add commissions to the insurance policies they sell to landlords. Most of this commission is then paid to the landlord or property managing agents in return. The cost of this hidden commission is passed on to you in the form of higher service charges.
Landlords, their insurance brokers and their agents owe you a legal duty not to make secret profits. The aim of the claim is to get your money back.
The Facts
Secret landlord commission can be up to 60% of the insurance premium you pay.
The Financial Conduct Authority has found that insurance brokers shared, on average, at least 50% of their commission with landlords and their property managing agents.
More than half of the insurance policies in the Financial Conduct Authority’s sample (58%) had a commission rate of 30% or more.
Some freeholders or property managing agents receive over 50% of insurance premiums as commission.
The average broker commission per policy in 2022 was over £2,500.
Leaseholder Action stands at a turning point in leaseholder rights in the UK. With new reforms introduced by the Financial Conduct Authority, leaseholders are now able to see precisely how block owners and brokers are profiting from buildings insurance.
Unfortunately, the Financial Conduct Authority has not provided any remedy for inflated insurance costs. That means that, unlike most other financial products, leaseholders cannot complain to the Financial Ombudsman.
The only way to get your money back is by bringing legal action through the courts.
You are not alone. Leaseholder Action is backed by legal experts at Velitor Law and funders Balance Legal Capital.
Risk-Free Legal Support: Our ‘no win, no fee’ offering ensures you’re fully supported without financial worry.
The time for change is now. Claim your rights, challenge hidden commissions, and join us to bring fairness and transparency to leasehold insurance.
Victim Stories
VICTIM STORY | MANCHESTER
Mrs W and her husband decided to downsize after their children left home. In 2006 they bought a flat in central Manchester. They loved their new home and all the benefits of living in the city centre. In 2017 they found that the cladding on their block was unsafe. Almost overnight their buildings insurance shot up by 300%. They have tried, with limited success, to find out exactly how much of their increased insurance premiums ended up being syphoned off as commission. Even though the cladding on their block has now been replaced, the increase in premiums has had a real impact on their lives. Mrs W says,
" We had thought in 2006 that this was our home for life. Now we want to move back into a house - however, this is only possible if we can sell. That doesn’t seem likely for a while yet.”
VICTIM STORY | CHESHIRE
Ms. F from Cheshire bought her leasehold flat in 2016. At that time the service charge, which included buildings insurance, was an affordable £254 per quarter. However, after the Grenfell Tower tragedy, it emerged that the cladding on her block was unsafe. Insurance premiums skyrocketed and at their peak rose to £700 per quarter. After querying the increased charges Ms. F discovered that large commissions were being levied on her insurance premiums. She has since joined Leaseholder Action. Ms. F says,
" These charges have pushed me into debt and I know many others in the same situation. I've asked just how much commission insurance brokers and freeholders have been raking in and never got a straight answer. We need to know if, and by how much, they have been profiteering off the back of the cladding scandal.”
“I have put years into getting my own landlord to pay back thousands of pounds in secret commissions and now I want to do that for you, the leaseholders in your block and thousands around the country. There are likely to be almost a million flats that could be affected.”
Who is involved
Velitor Law is a law firm regulated by the Solicitors Regulation Authority helping its clients bring claims against powerful institutions that have acted unlawfully.
For more information about Velitor Law, visit their website here.
Balance Legal Capital is a leading litigation funder based in London. It provides money to enable groups of people who have been wronged by large corporations and other organisations to bring legal action that they could not afford to bring as individuals.
Balance Legal Capital is a funder member of the Association of Litigation Funders (ALF), the body responsible for the self-regulation of litigation funding in England and Wales. For more information about Balance Legal Capital, visit their website here.
