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Leaseholders
are concerned by commission earned by Block Management Agents
Released
3rd March 2009
Summary:
Neil Cook of Ember JD Insurance
Brokers is now offering their products via the jml Insurance
website. One concern is the hidden commission that managing
agents might be achieving without leaseholders knowledge.
Neil
Cook an Insurance broker is now working for Ember JD Insurance
Brokers and jml Insurance.co.uk have recently started introducing
various Ember products on their website.
One
of these products is insurance for Blocks of Flats. Neil Cook
has a lot of concerns about the fact that Flat owners could
be paying up to double the best rates for buildings cover,
thanks to hidden commission being shared out between brokers
and managing agents.
Neil
was interviewed by Jamie Elliott for an article in The Observer
on the 1st March entitled "Now angry leaseholders kick back
at the brokers"
It
appears that owners of leasehold flats are paying up to double
the market rate for buildings insurance because brokers are
paying "kickbacks" to the block management property agents
who manage their homes
Some
block management companies are choosing the insurer that pays
the most commission, instead of the company that offers the
best value - and then sharing this commission with the managing
agent.
The report goes on to say that Insurers who pay the most commission
are often also those who charge the highest premiums. Although
leaseholders bear the extra cost, they rarely find out about
the inducements because there may not be an invoice and the
inducements do not appear on their service charge statement
or other documents.
This
must be normal as a representative from jml-insurance.co.uk
advised that with flats their company are involved with they
have absolutely no idea who the insurance company used are
as the block management companies involved just send out an
annual request for ground rent service charges and insurance
and the item insurance would just be mentioned in the annual
accounts
Neil
Cook, of Ember
JD Insurance Brokers,
has been approached by an increasing numbers of leaseholders
who are being charged significantly above the going rate.
Neil said "I see a lot of inflated premiums for blocks of
flats where it just doesn't add up, and there is no way the
broker has sought the best deal," he says. "Sometimes it is
as much as double but, typically, the premium is about 30%
above what you would expect to pay."
There
obviously is a problem with this situation and Philip Suter
of jml insurance.co.uk who has been in the property business
for over 25 years said" Leaseholders should ask their block
management agents for details of the insurance if they feel
the amounts are excessive. Normally block management agents
will provide copies of quotes for re-decoration, carpeting
and other repairs for the individual leaseholders so there
shouldn't be a reason why they can't be provided with insurance
information."
Philip
went onto say "If you are not happy with the Block Management
agent, get together with other leaseholders and the elected
Directors of the block's company and appoint new agents. Most
blocks of flats have a residents company that the agents actually
work for and the Directors are usually some of the leaseholders."
"Most
block management agents in my experience do not necessarily
charge very high management fees for the amount of work they
carry out during the course of the year so this is why they
are probably trying to gain additional revenue from the insurance
policies they arrange for the various leaseholders".
Ends....
Company
Information
jml
Insurance.co.uk is
part of jml
Property Services, the trading name of Jeffrey
Milner Ltd. The company is
an UK based company that was established in 1979. jml insurance
acts as an introducer for insurance companies selling property
insurance including landlord and tenant rental products, pet
insurance, wedding insurance, motor insurance, car hire excess
insurance, travel insurance and non standard insurance products.
They also operate jmlvillas.com
an online marketing service for owners of holiday home property
to advertise and are part of the jml
Group that includes jml
Training and Consultancy.
©
jml Property Services March 2009
See
also: Now
angry leaseholders kick back at the brokers -2nd March 2009
Problems
experienced by owners of properties in Blocks of Flats / Joint
Freehold
- November 2007:
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