Thousands of people who own the flats are looking for millions of pounds in compensation as part of the legal action employed against the companies owned by their apartment blocks.
Legal letters viewed by BBC News allege freeholders – who owns the block of the flat – charged the secret commission fee for the arrangements of the insurance policies of the buildings.
Letters claim that the Commission was then added to the service fee paid by the owners of the flats – or leaseholders – without their knowledge.
Lawyers suggest that each flat owner may get up to £ 2,000 in compensation. All companies deny that they broke any rules.
Fees were paid to freeholders by insurance companies to buy their products.
Leaseholders allege that they were then added to the cost of insurance of buildings by freeholders or their agents, and they were charged a total amount as a service fee. They say that this was done without their knowledge.
For example, if the price of insurance on a block of flats is £ 80,000, the insurer can pay the freeholder £ 20,000 in the commission to buy his product.
But they claim that the entire £ 100,000 would be charged with leaseholders, without knowing that the commission fee was included.
Legal firm Welter Law has written four big freeholders – E&J Estates, Consider Business Group, Long Harbor and ground fare funds from 2,500 flat owners.
They allege that companies received commissions for the arrangement of insurance policies that were “illegal because it is the amount for a secret commission for a secret commission received without our customers.”
They are not only demanding the refund of the Commission, but their customers have also paid interest and any insurance premium tax.
Since the insurance costs on the blocks of flats since the fire of the Granfel Tower have been spiral, and the commission is usually one percent of insurance costs, the lawyers allege that the owners of the property have benefited as a result of the disaster.
More companies are likely to be targeted, as 20,000 leaseholders have already signed a class action lawsuit, saying Liam Spander says Velitor Law.
“We started with them [four] For various reasons – the number of claimants and the best spread across the country. But we feel that there can be actually 20 different zamindar groups after which we can potentially go. ,
A report by the Regulatory, Financial Conduct Authority (FCA), published in April 2023, found that commission rates on insurance could be up to 62%.
The FCA found that an insurance broker paid to the average commission 2019 increased from £ 1,785 per policy to £ 2,595 in 2022.
“Most of our sample brokers wrote,” It was written, “did not give us enough evidence to show that they provide constant fair price for products of multi-radical buildings.”
Since January 2024, insurers and brokers need to tell how much insurance commission they are paying to freeholders.
David Walsh, who owns a flat in South-West London, is one of those who have joined the trial.
The annual building insurance costs for their apartment blocks, including 144 flats, have been three times in recent years, they say, mainly for more than £ 150,000 because the building is assessed as dangerous cladding. This year the service fee is around £ 5,000.
Despite asking the freeholder, E&J Estates, how much commission it is receiving, 50 -year -old Shri Walsh says he is still waiting for a response.
He told the BBC, “He ignored us for only months, then he refused to comment, then he said,” No, it’s not that we see it, “he told the BBC.
“So I have never reached the bottom of the commission. I have now signed up in the class action case, but I was unaware of how the game was played recently.”
The BBC contacted freeholders who are subject to planned legal action. A spokesperson of the Ground Rents Income Fund told the BBC that “We do not consider a valid basis for the claim against Griff.”
Pental Capital Partners, who arranges insurance for E&J Estates, stated “various claims made by Welter are fundamentally incorrect”.
The General Consent Trade Group stated that any legal action “will be strictly protected.”
The homeground, which provides insurance products for long harmony, stated that its services “are under the regulatory regime of the Financial Conduction Authority” and that “it receives commission to suit that strict regulatory structure”.
