Following an investigation by This is Money into secret commissions and kickbacks charged to leaseholders, Leaseholder Action’s Liam Spender explains that there is often a “conspiracy of silence”, with insurance brokers and utility companies unwilling to disclose how much they are sharing with landlords and managing agents.
Liam goes on to explain that, while the practice of kickbacks is “very prevalent”, “commissions are usually a percentage added on to the cost and concealed within the price, making them difficult to detect”.
“Residents often see service charges demanded and reported under broad headings like ‘general maintenance’ and ‘amenities’ so it is hard to tell what costs are included and whether they are affected by secret commissions”.
Liam further explains that, even where leaseholders obtain supporting invoices under section 22 of the Landlord and Tenant Act 1985, it can be difficult to prove wrongdoing.
Liam successfully challenged his own freeholder over secret insurance commissions, and Leaseholder Action is now taking on freeholders and insurance brokers for sharing commissions that have increased insurance charges by up to 60 per cent. Thousands of leaseholders have already joined the claim. If you think you may be affected, please register your interest using the form below and a member of our team will be in touch.
Liam’s comments were published in This is Money.
