60% of leaseholders 'ripped off' on their building insurance

Landlords that are also leaseholders are being ripped off according to a recent report in Property Week. It highlights a claim by Chainbow which manages more than 77 sites that are home to 3600 leaseholders across the south east said that landlord insurance scams are widespread.

This is because the landlord who is responsible for insuring a residential block often receives a commission from the landlord insurance broker or landlord insurance company for using their landlord insurance. As the landlord will ultimately pass on the costs of this landlord insurance to the leaseholders their is little incentive for the landlord to find the cheapest landlord insurance. There is an incentive instead for the landlord to seek out the landlord insurance policy or landlord insurance broker that pays the highest commission.

The RICS has launched a consultation into the transparency in professional fees charged on property transactions and services and is currently gathering evidence. Central to the investigation is the declaration of insurance remuneration and commissions.