Freehold Estate, deeds say to pay them insurance, gone wrong, they will not reply

[Peter Rourke]

Bought Guest House 2015. Paid the Estate insurance for 7 years. Then the new cost was £1500 just to cover fire. I researched and found I could get for £600 (Direct Line) for FULL coverage and also FULL contents!
Emailed the estate. less than 24 hours later they offered £750 to £800 for full building insurance.
I was bloody minded and said no, and went with Direct Line. .A couple of reminders came through, then nothing. An invoice was received for the year after. I stayed with Direct Line and ignored the Estate.
After 3 years I suddenly received a solicitors letter that it was going to court. I ended up settling which meant I paid the last 3 years to them and also I had been paying Direct Line. Ah well.

However, I then learnt that in November 2024, a supreme court judge found for a leaseholder against the freeholder. The reason was that his property had been built as a residential home, and whilst it was now also a business, it is still being lived in.

This is also the case with me. The Guest House was built in Victorian times in Llandudno as a residential property. Whilst it is now a guest house, we still live in it.

Unfortunately, the solicitor who informed me of this is no longer on my radar. I emailed the estate with this information. They said they would get back to me. 4 months later and they have not.

I could do with a bit of advice if possible. Do I just suck it up (but what is to stop the estate charging £10,000 for next years insurance?). They will not sell the freehold to me, or they would charge an absolute premium which I cannot afford). Or do I try an informed solicitor, which I am loathe to do without knowing the chance of success!!

Any advice appreciated, even if it is negative. I'm a big boy now

 

[Paul Kelly ICHYB]

As always, it mainly comes down to what your lease says...

 

[fisicx]

As a freeholder. If the lease says they are responsible for insurance all you can do is challenge the premium and choice of underwriter.

Did the agent proved full disclosure on the initial quote?

 

[FreddyG]

Do I just suck it up (but what is to stop the estate charging £10,000 for next years insurance?). They will not sell the freehold to me, or they would charge an absolute premium which I cannot afford). Or do I try an informed solicitor, which I am loathe to do without knowing the chance of success!!

Any advice appreciated, even if it is negative. I'm a big boy now

You do not have to suck it up.

I am not a lawyer, but I recently had to deal with this type of rubbish, so here is a summary of your rights in your case - You have the right to:

• Inspect the insurance policy and its cost breakdown.
• Challenge the premium before or after payment.
• Pay under protest and reserve your rights.
• Take the matter to the Tribunal without needing a solicitor.
• Benefit from statutory protection even if the property is mixed residential and commercial use.

Here are the main Acts that govern what a freeholder can charge for insurance and what a leaseholder can challenge.

Landlord and Tenant Act 1985 – Section 19(1)​

• Service charges (which include insurance costs) must be “reasonably incurred” and of a “reasonable amount.”
• This means the landlord/freeholder cannot just pick any insurer or any price — they must show the cost was fair and competitive.
• Leaseholders can apply to the First-tier Tribunal (Property Chamber) to decide if the amount is reasonable.

Landlord and Tenant Act 1987 – Section 42​

• Money paid as service charges must be held on trust for the leaseholders.
• It must be used only for the purposes stated in the lease (e.g., genuine insurance costs), not for profit or secret commissions.

Commonhold and Leasehold Reform Act 2002​

• Gives leaseholders rights to information about insurance and other service charges.
• Landlords must provide summaries of insurance cover and copies of the policy if asked.

Leasehold and Freehold Reform Act 2024​

• Passed in 2024 (some parts not yet in force).
• Introduces new transparency rules: landlords will have to disclose commissions and are restricted from charging hidden mark-ups on insurance policies.
• Strengthens leaseholder rights to challenge unfair costs and opaque arrangements.

I suggest the following letter -

Formal request for justification of insurance premium under Section 19, Landlord and Tenant Act 1985

Dear Messrs Dowee, Cheetem & Howe,

I am writing in relation to the building insurance premiums charged for "Belle View", 17, Oil Drum Lane, Siddcup.

I have reason to believe that the costs demanded are unreasonably high compared to equivalent insurance policies offering similar or broader cover.

Under Section 19(1) of the Landlord and Tenant Act 1985, only costs that are reasonably incurred and of a reasonable amount are recoverable from leaseholders.

I therefore request, within 21 days, the following:

• A full copy of the insurance policy and schedule,
• A breakdown of all premiums and commissions paid,
• Copies of alternative quotes obtained before renewal,
• Evidence that the chosen insurer and terms represent reasonable market value.

Unless satisfactory evidence is provided, I will apply to the First-tier Tribunal (Property Chamber) for a determination of reasonableness and recoverability of the charges.

Yours faithfully,

Fred Grimp-Water.
___________________________________________

The beagle dealing with this also sent us a so-called "precedent pack" of eight cases under English law. I have sent them to you as a direct conversation. Enjoy!

 

[Peter Rourke]

You do not have to suck it up.

I am not a lawyer, but I recently had to deal with this type of rubbish, so here is a summary of your rights in your case - You have the right to:

• Inspect the insurance policy and its cost breakdown.
• Challenge the premium before or after payment.
• Pay under protest and reserve your rights.
• Take the matter to the Tribunal without needing a solicitor.
• Benefit from statutory protection even if the property is mixed residential and commercial use.

Here are the main Acts that govern what a freeholder can charge for insurance and what a leaseholder can challenge.

Landlord and Tenant Act 1985 – Section 19(1)​

• Service charges (which include insurance costs) must be “reasonably incurred” and of a “reasonable amount.”
• This means the landlord/freeholder cannot just pick any insurer or any price — they must show the cost was fair and competitive.
• Leaseholders can apply to the First-tier Tribunal (Property Chamber) to decide if the amount is reasonable.

Landlord and Tenant Act 1987 – Section 42​

• Money paid as service charges must be held on trust for the leaseholders.
• It must be used only for the purposes stated in the lease (e.g., genuine insurance costs), not for profit or secret commissions.

Commonhold and Leasehold Reform Act 2002​

• Gives leaseholders rights to information about insurance and other service charges.
• Landlords must provide summaries of insurance cover and copies of the policy if asked.

Leasehold and Freehold Reform Act 2024​

• Passed in 2024 (some parts not yet in force).
• Introduces new transparency rules: landlords will have to disclose commissions and are restricted from charging hidden mark-ups on insurance policies.
• Strengthens leaseholder rights to challenge unfair costs and opaque arrangements.

I suggest the following letter -

Formal request for justification of insurance premium under Section 19, Landlord and Tenant Act 1985

Dear Messrs Dowee, Cheetem & Howe,

I am writing in relation to the building insurance premiums charged for "Belle View", 17, Oil Drum Lane, Siddcup.

I have reason to believe that the costs demanded are unreasonably high compared to equivalent insurance policies offering similar or broader cover.

Under Section 19(1) of the Landlord and Tenant Act 1985, only costs that are reasonably incurred and of a reasonable amount are recoverable from leaseholders.

I therefore request, within 21 days, the following:

• A full copy of the insurance policy and schedule,
• A breakdown of all premiums and commissions paid,
• Copies of alternative quotes obtained before renewal,
• Evidence that the chosen insurer and terms represent reasonable market value.

Unless satisfactory evidence is provided, I will apply to the First-tier Tribunal (Property Chamber) for a determination of reasonableness and recoverability of the charges.

Yours faithfully,

Fred Grimp-Water.
___________________________________________

The beagle dealing with this also sent us a so-called "precedent pack" of eight cases under English law. I have sent them to you as a direct conversation. Enjoy!

Thank you so much for your time and reply Freddy.

Unfortunately, I believe that your answer deals with private leaseholders whereas we are a business. I cannot find any ombudsmen that deal with the business side of things, but I stand on being corrected in that.

Cheers
Peter

 

[fisicx]

Even as a business you can challenge the agent.

Ask for the insurance policy breakdown, the commissions and kickbacks paid, admin fees and which underwriters were approach to obtain a quote.

Our broker gets quotes from about 16 underwriters and fully details his cost and who he recommends.

 

[FreddyG]

Very true - so far no mixed-use buildings, residential & business

No single Supreme Court ruling yet, but Tribunals have often held that where a property is partly residential, leaseholders still enjoy the protections of the 1985 Act for the residential portion.

The fact that you live in your guest house means your lease is not purely commercial and the Act’s “reasonableness” protection applies in my unqualified opinion!

 

[Peter Rourke]

Very true - so far no mixed-use buildings, residential & business

No single Supreme Court ruling yet, but Tribunals have often held that where a property is partly residential, leaseholders still enjoy the protections of the 1985 Act for the residential portion.

The fact that you live in your guest house means your lease is not purely commercial and the Act’s “reasonableness” protection applies in my unqualified opinion!

Interesting. That gives me something to try at least. Cheers Freddy

 

[FreddyG]

Here are some aspects to bear in mind -

1. Burden of proof:
   The freeholder must show the premium was reasonable, not you.
   If they can’t demonstrate multiple quotes, policy terms, and broker commissions, they’re exposed.
2. Comparable cover:
   If you have proof that a policy with equivalent or broader coverage costs less (like your £600 quote from Direct Line), that’s powerful evidence.
3. Tribunal route:
   File under Section 19 of the Landlord & Tenant Act 1985 to challenge insurance premiums as “unreasonably incurred.”
   You don’t need a solicitor to start, but of course professional help does improve your odds.
4. Settlements don’t waive future rights:
   The fact that you settled past arrears doesn’t prevent you from challenging future charges.
5. Pay under protest:
   To avoid breach of lease, you can pay the demanded amount “under protest” while pursuing your challenge.

It is always important to show that you are going to cost them money by joining the awkward squad! Anyway, it's fast approaching beer o'clock, so I'm out of here!

 

[Peter Rourke]

Here are some aspects to bear in mind -

1. Burden of proof:
   The freeholder must show the premium was reasonable, not you.
   If they can’t demonstrate multiple quotes, policy terms, and broker commissions, they’re exposed.
2. Comparable cover:
   If you have proof that a policy with equivalent or broader coverage costs less (like your £600 quote from Direct Line), that’s powerful evidence.
3. Tribunal route:
   File under Section 19 of the Landlord & Tenant Act 1985 to challenge insurance premiums as “unreasonably incurred.”
   You don’t need a solicitor to start, but of course professional help does improve your odds.
4. Settlements don’t waive future rights:
   The fact that you settled past arrears doesn’t prevent you from challenging future charges.
5. Pay under protest:
   To avoid breach of lease, you can pay the demanded amount “under protest” while pursuing your challenge.

It is always important to show that you are going to cost them money by joining the awkward squad! Anyway, it's fast approaching beer o'clock, so I'm out of here!

Oh I am awkward alright! Built a big ironwork business in the past with 200 blacksmiths on the books and thousands of regular customers that we looked after extremely well. I expect the same in return and have successfully beaten BT, Opus Energy, Kingdom Security (6 year fight) and every North Wales council since I moved here, despite a bad head accident in 2009 which has led me to being classed as disabled and recently diagnosed with PTSD!!! (stubborn Northerner)

I like those points you have made, especially about beer o'clock, so I will join you and look at your post again tomorrow