Landlords and Property agents were accused this week by Royal Institution of Chartered Surveyors (RICS) of overcharging leasehold owners of flats by taking out unnecessarily expensive building insurance on their behalf and hiving off a share of the commission. - often as high as 30%.
The UK press picked up on the results of an investigation into insurance commissions by the Royal Institution where evidence found by RICS indicated that insurance brokers and agents or freeholders routinely split commission earned from insurance policies, which are paid for by leaseholders.
The truth is that most conveyancing lawyers who act for landlords and tenants have known this for years. One may wonder what money did RICS spend on this 'investigation into the obvious'?
Conveyancing lawyers who specialise in leasehold conveyancing often find themselves advising groups of tenants how to purchase freeholds.
It is not just buildings insurance: some landlords or agents grossly inflated cost of repairs and maintenance. In the recent debate over Jacqui Lait’s Leaseholders Rights Bill all parties now seem to accept that leaseholders are in a position of disadvantage.
The above revelations follows hot on heals of the story by Channel 4 which raised concerns that home-sellers may not know how much commission they are being charged by a Home Information Pack provider.