Sir Peter Bottomley has vowed to end high commissions between property negotiators and brokers - years after regulators have not acted
Sir Peter Bottomley, a Conservative MP and co-chairman of a parliamentary group looking into leasehold reform, has vowed to end the ‘cowboy commisions’ property negotiators agree with insurance brokers.
Bottomley said: “Those receiving cowboy commissions by ripping off leaseholders in order to secure the landlords’ insurance business will be brought to account.”
Bottomley now has backing from M2, a specialist recovery company has clawed back hundreds of thousands for clients - including a banking group and high street retail chain - that he claims have fallen victim to the practice.
The process is controversial because there is evidence that the property managing agent or property owner collects a commission - sometimes quite high - from the premium that the broker handles (see process below).
Campaigners say the figures are often bundled into wider service charges and not revealed clearly to the leaseholders.
The calls will put renewed pressure on the CMA and the FCA to act, after both regulatory bodies looked at the issue but have so far decided not to take action.
The CMA has previously found evidence of unreasonably high charges to leaseholders.
M2 founder Neil Holloway said the commissions were secret from the leaseholders.
He said: ”Agents are not being transparent and are being influenced by insurance brokers to push tenants into situations that may not be best for them,”, according to the Sunday Times.
However, Biba said the commissions, agreed between the broker and property manager or owner, were not secret and fairly accounted for.
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