M2 Recovery believes that secret insurance payments are undermining the benefits of Right to Manage (RTM) legislation, and RTM companies should act now to recover the money they have lost.
Right to Manage (RTM) was introduced through the Commonhold and Leasehold Reform Act 2002, and allowed leaseholders and tenants to take over the management of their property from landlords. However, management agents and insurance brokers are working together to exchange hidden payments behind the backs of the RTM companies, adding illegal costs.
Neil Holloway at M2 Recovery has estimated that these payments are increasing the insurance premiums by between 10 and 40% for over half of the RTMs which have been set up. He commented: “There are around 6,000 RTM companies in the UK and almost everyone we have looked at has been subject to increased insurance costs. They are actually paying the ‘kickback’ the insurance broker gives to their agent to secure the business. This amounts to millions of pounds being lost each year. These are referred to as commissions, but they are just hidden illegal payments that can, and should, be claimed back.”
M2 Recovery has shown that these payments are illegal and can be recovered going back six years. Hidden payments are common across the commercial property sector and although many firms claim to have stopped the practice M2 Recovery has found many cases where these are still taking place. Over the last ten years this could have cost property owners and occupiers in excess of £5 billion.
“We would encourage all RTM companies to request a free consultation us at M2 so we can look at the insurance they have been paying and if we can establish that there have been hidden payments, M2 can then start the process of recovering this money.” concluded Mr Holloway.
M2 Recovery was established in 2016 and has already recovered millions of pounds in illegal payments on behalf of a range of clients including RTM companies.