High Court rules landlord to repay overcharged insurance rent to tenant

The High Court has ordered the landlord of the Trocadero Centre in London to repay substantial sums for overcharged insurance rent to one of its tenants, Picture House Cinemas Limited, in a case whose ruling provides important takeaways for both landlords and tenants.

The case: London Trocadero (2015) LLP v Picturehouse Cinemas Ltd [2025] EWHC 1247 (Ch)  

Under the lease, the landlord (London Trocadero) covenanted to insure the premises with the tenant (Picture House Cinemas Limited) required to contribute a proportionate part of the premium. However, Picture House Cinemas Ltd disputed the inclusion of the commission paid to the landlord via insurance brokers within the insurance rent sum, and an additional 35%, “placement, administration and work transfer fee”, which the landlord imposed on top of the insurance premium in 2022/23.

The insurance for the premises formed party of a block insurance policy arranged by the landlord’s managing agents.

In some cases, brokers charge the insurer a commission, which is then rebated back to the landlord (indirectly, through the managing agent). This commission can be included in the premium by the insurer and ultimately passed onto the tenant.

It was this cost that the tenant in this case challenged, disputing its recoverability of as part of the insurance rent, and claiming it was not contractually obliged to pay any portion of the insurance premium.

The ruling: London Trocadero (2015) LLP v Picturehouse Cinemas Ltd [2025] EWHC 1247 (Ch)

The High Court agreed with the tenant and held the construction of the lease did not permit the landlord to recover any part of the broker’s commission as part of the insurance premium. The 35% administrative fee for the 2022/23 year was also not recoverable from the tenant.

The landlord was ordered to reimburse the amount of the insurance rent that corresponded to the landlord’s commission and the 35% fee which was added to the insurance rent in 2022/23.

Key takeaways for landlords and tenants

This decision provides important takeaways for both landlords and tenants:

• For landlords: The case highlights the need for precise lease drafting, particularly when seeking to recover additional costs such as brokers’ commissions or administrative charges. If the lease does not clearly permit the recovery of such sums, they may not lawfully be charged.
• For tenants: The case also serves as a reminder for tenants to review and scrutinise service charge and insurance rent invoices, and to seek expert advice as to what is recoverable under the terms of its lease. As demonstrated, unauthorised or inflated charges can be challenged and potentially recovered.

The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be. If you are a landlord or tenant seeking clarity on your lease and would like a conversation to find out how we might help you, please get in touch.