The Govt is consulting on permitted insurance fees and tomorrow is the last day to complete!
The problem? Leaseholders receive inflated bills for buildings insurance because brokers often pay a kickback to the agent or freeholder who placed it, which is then added to the bill, but not itemised.
The consultation acknowledges that hidden fees are unacceptable, but floats the alternative of permitted, transparent fees – to be itemised on the insurance or service charge bill. Once transparent, the fee can be challenged under the provisions of the Landlord and Tenant Act 1985. However the one question the survey seems to avoid is what the fee is for!
Question 7 shown here is a good example. Yes? No? Well it depends!!!
If it goes to the broker then it’s part of the cost of the product, if to the agent, presumably salaried, why do they need to be paid twice? And if the freeholder doesn’t employ an agent, then it’s simply a service charge.
Most of the questions are aimed at brokers & MAs asking about their business practices and it may be that the results will provide the needed clarity on if and when a standalone fee might be reasonable. But the notion of a ‘permitted insurance fee’ has angered many leaseholders and begs a lot of questions!