Crippling insurance bills sent to cladding victims are loaded with \u201csecret\u201d commissions to freeholders, agents and brokers.<\/p>\n\n\n\n
The Sunday Mirror can reveal hefty kickbacks are often hidden in annual renewal demands \u2013 and some have risen 1,200 per cent<\/p>\n\n\n\n
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Since the Grenfell Tower fire, which claimed 72 lives in 2017, some four million flats are caught up in the cladding and safety crisis.<\/p>\n\n\n\n
High-rises which passed regulations are being re-inspected and leaseholders fear typical bills of \u00a340,000 for repairs not covered by the freeholder, the developer or a government fund.<\/p>\n\n\n\n
PM Boris Johnson has promised leaseholders will be protected from massive bills and an announcement is expected within weeks.<\/p>\n\n\n\n
Meanwhile, insurance has rocketed on thousands of towers after unsafe materials were found.<\/p>\n\n\n\n
Freeholders or managing agents typically arrange the insurance and one industry expert told the Sunday Mirror commissions can bump up premiums by 25-50 per cent.<\/p>\n\n\n\n
Sir Peter Bottomley last night led calls for the practice to be investigated.<\/p>\n\n\n\n
The Tory MP for Worthing said: \u201cUnfair service charges cost leaseholders hundreds of millions of pounds each year, with secret commissions on buildings insurance deals making up a large part of it.<\/p>\n\n\n\n
\u201cRegulators must do more to bring to an end practices that unfairly impact leaseholders.\u201d<\/p>\n\n\n\n
Neil Holloway, founder of M2Recovery, has reclaimed millions from managing agents and freeholders in the past three years.<\/strong><\/p>\n\n\n\n He is currently dealing with a case in North London where the agents\u2019 commission soared from \u00a39,000 to \u00a340,000.<\/strong><\/p>\n\n\n\n Mr Holloway said: \u201cLeaseholders come to me with huge premiums that are not competitive and they can\u2019t understand why.<\/strong><\/p>\n\n\n\n \u201cOften it\u2019s because there are lucrative commissions that inflate the price.\u201d<\/strong><\/p>\n\n\n\n Leaseholders in a fire-risk high-rise in Leeds questioned why their insurance had shot up to more than \u00a31,000 per flat. They were then accidentally sent an email detailing a 43 per cent commission share between the broker and the building\u2019s owner. A property tribunal can rule whether insurance costs are reasonable \u2013 but bringing a case is costly. The British Insurance Brokers Association said members aimed to get the \u201cbest deals possible for clients\u201d.<\/p>\n\n\n\n A spokesman said: \u201cThis is an incredibly difficult time. Brokers will do all they can to give clients as many options as possible but it is the insurer that sets the premiums.\u201d<\/p>\n\n\n\n The Association of British Insurers said premiums reflected the increased risk but added: \u201cWe understand the difficulties and stress leaseholders are facing.\u201d<\/p>\n\n\n\n Leaseholders had to accept a jaw-dropping \u00a3658,000 insurance quote as it was the only on offer. Owners in Seren Park Gardens, Greenwich, saw a 440 per cent hike on the \u00a3123,000 buildings premium they paid last year. The deal saw the insurance broker split commission of \u00a332,500 with a property management company, plus \u00a324,000 in unspecified fees.<\/p>\n\n\n\n It means service charges will double for 219 leaseholders at the flats in South London \u2013 without taking into account a looming \u00a39million repairs bill. The residents\u2019 group running the building as directors under a Right To Manage scheme faces bankruptcy unless it can secure a loan.<\/p>\n\n\n\n Furious director Leigh Aldous, 39, said: \u201cThe broker pushed us out to tender at the last minute and painted us as a terrible risk.Our bill has gone up by \u00a3535,000<\/h4>\n\n\n\n
And even the Government secured \u00a370,000 through Insurance Premium Tax.<\/em><\/h5>\n\n\n\n
\u201cThe consequences for the broker? We are forced to take up their offer of a massive premium and give them a non-refundable commission.\u201d<\/p>\n\n\n\n