In a legal judgement that took the commercial property sector by surprise, the long-running dispute between Cineworld-owned Picturehouse Cinemas and the landlord at its flagship central London site looks set to continue.
Picturehouse has now won a judgment against the landlord London Trocadero LLP concerning the overcharging of commission on insurance rent at Picturehouse Central, with the landlord now required to repay the cinema operator an amount reportedly above £700,000.
In response, the head of commercial property at law firm Harper James – solicitor Parmit Gill – ,says the recent ruling warns landlords against hiding insurance commissions and pushes for more transparency in commercial leases.
Gill says: “The recent High Court ruling involving the Trocadero Centre and its tenant, Picturehouse, found that landlords receiving large insurance commissions – sometimes up to 60% of the premium – were potentially overcharging tenants, who believed they were simply covering the cost of insuring the building. The judgment makes it clear that such commissions, which were not properly disclosed or justified, could be challenged and reclaimed.
“This is a landmark decision that landlords can’t afford to ignore. Many landlords bundle insurance premiums into service charges, often relying on managing agents or brokers. If these premiums include hefty commissions that aren’t transparently disclosed, they could now face repayment claims from their tenants.
“For tenants, particularly businesses still grappling with tight margins, this ruling offers a new avenue to challenge historic service charge demands and push for more transparency in lease negotiations.
“The key takeaway is this: both landlords and tenants need to revisit the terms of their leases and ensure insurance arrangements are not only fair but fully disclosed. This decision marks a shift toward greater accountability, and small business landlords who get ahead of it will be in a much stronger position moving forward.”
Please visit:
Our Sponsor
