Flat owners plan legal claim over ‘secret’ insurance charges to freeholders

Thousands of people with apartments are looking for millions of pounds compensation as part of the legal transaction planned against companies with apartment blocks.

Legal letters by BBC News claim that free owners – those with apartment blocks – buildings receive secret commission fees to regulate insurance policies.

The letters claim that the commission is later added to the service fees paid by the owners of the apartment – or the rental owners.

Lawyers suggest that each apartment owner can receive compensation up to £ 2,000. Companies deny that they break any rule.

Fees have been paid to free owners by insurance companies to purchase their products.

The rent holders then claim that they were added to the cost of building insurance by the free or agencies, and the total amount was collected in the form of service fees. They say it was done without information.

For example, if the insurance costs in an apartment block is £ 80,000, the insurance company may pay £ 20,000 to the free owner to purchase the product.

However, they claim that the entire £ 100,000 will be charged to the rent holders without knowing the sum of the commission fee of the total.

Velitor Law, a law firm, has written four major freelances on behalf of 2,500 fixed owners – E & J Estates, Consensus Business Group, Long Port and Ground Rentes Income Funds.

Companies claim that they have received commissions to organize illegal insurance policies, because it means a secret commission taken without our previously informed consent without our customers “.

They are not only looking for the return of the commission, but also interest and any insurance premium tax paid by its customers.

Since the insurance costs on the blocks of apartments since the Grenfell Tower have increased and commissions are usually a percentage of insurance costs, lawyers claim that property owners benefit from disaster.

Liam Spender of Velitor Law is likely to target more companies, because the 20,000 lease holders have already registered in the class action case.

“We started with these [four] For various reasons – the number of plaintiffs and the best spread throughout the country. But we think that there may be 20 different host groups that we can potentially go. “

A report of the Financial Behavior Authority (FCA) regulator published in April 2023 found that insurance commission rates could be as high as 62%.

The FCA found that the average commission paid to an insurance broker rose from £ 1,785 per policy in 2019 to £ 2,595 in 2022.

“Most of the brokers in our example,” he wrote.

Since January 2024, insurance companies and brokers are required to explain how much insurance commission they have paid to free owners.

David Walsh, who has an apartment in southwest London, is one of the participants in the case.

Annual building insurance costs for the apartment block with 144 apartments have doubled in recent years, because the building is deemed to be dangerous coating more than £ 150,000. This year’s service fee is almost 5,000 £.

Although Freeholder asked E & J Estates how much commission he has received, 50 -year -old Mr. Walsh says he still expects an answer.

“They ignored us for months, then they refused to comment, then they said, ‘No, we don’t see it.” He said.

“That’s why I never came to the bottom of the commissions. Now I have registered in the class action case, but I wasn’t aware that the game was played like this recently.”

The BBC approached free owners subject to the planned legal procedures. Floor rents spokesman income funds, “We do not think that there is a valid basis for a request against Grif,” he said.

Penult Capital Partners, who organized insurance for E & J Estates, said that “various allegations made by Velitor were fundamentally misunderstood,” he said.

Consensus Business Group said that any legal transaction will “strongly defend”.

The home area, which provides insurance products for the Long Port, said that its services are “subject to the regulatory regulatory regulator of the Financial Behavior Authority” and “receive commissions in accordance with this solid regulatory framework”.