If you’re a leaseholder, you might have paid more for your insurance than you should – and the reason could be hidden in plain sight. Secret commissions have become a significant issue in the leasehold property market, leaving millions of UK homeowners unknowingly out of pocket. But what exactly are secret commissions, and why should you care? 

What are leaseholder secret commissions? 

Secret commissions occurred when landlords or property managers received payments, often undisclosed, from insurance brokers or providers.  

The problem?  

These costs were passed on to leaseholders through inflated premiums and left homeowners paying far more than necessary – all without their knowledge or consent. 

How big Is the problem? 

The scale of secret commissions is staggering: 

• In some cases, commissions make up as much as 60% of the total premium. 

• From 2019 to 2022, insurance brokers earned £159.4 million in commissions on leaseholder policies, according to the Financial Conduct Authority (FCA). 

• Leaseholders often have no idea these commissions exist, as they’re rarely itemised in service charge statements. 

Why are secret commissions unfair? 

Secret commissions create several issues for leaseholders: 

Lack of Transparency 

These fees are hidden by being added onto insurance premiums, leaving leaseholders unaware they are being charged for them. 

Conflict of Interest 

Landlords and brokers may prioritise their financial gain over securing the best or most affordable insurance policy for the building. 

Inflated costs 

Leaseholders end up paying unnecessarily high premiums, sometimes thousands of pounds more than the actual cost of coverage. 

What can leaseholders do? 

If you’ve been affected by hidden commissions, you may be entitled to compensation. Some leaseholders have already taken legal action, with one claimant successfully challenging a £100,000 insurance commission, setting a precedent for others. 

How to check if you’re eligible 

You could be eligible to claim compensation if: 

• You own (or have owned) a leasehold flat in England or Wales. 

• You pay for insurance as part of your service charge. 

• Your building is managed by a third party (not the residents). 

Successful claimants could recover: 

• Hidden commissions. 

• Additional insurance premium tax costs. 

• Interest dating back at least six years. 

How to join the claim 

Now is the time to take action. If you think you might be affected, check your eligibility and explore your options for claiming compensation. 

Law firms across the UK are offering no-win, no-fee services to help leaseholders claim back what they’re owed. These firms handle the legal process, ensuring you don’t have to pay upfront costs or deal with complex paperwork. 

The financial impact of secret commissions on leaseholders is immense, and the longer landlords and brokers get away with it, the more people will lose out. Join the claim today and get back what’s owed to you.  

You could recover thousands of pounds.