There has been a recent landmark decision in the case of London Trocadero (2015) LLP v Picturehouse Cinemas Limited [2025], which all commercial landlords need to be aware of, as it could mean they have to reimburse their tenants some of the insurance rent that has been paid to them under their lease.
Our Property Litigation Solicitors explore the recent Court of Appeal decision that could have significant financial consequences for commercial landlords recovering insurance rent from tenants.
The Case Explained: What Went Wrong?
The facts of this particular case are that the tenant, Picturehouse, was a tenant in the Trocadero Centre in London from which it operated a cinema. Under the terms of the lease, the landlord was required to arrange insurance for the whole of the Trocadero Centre. The landlord did this by obtaining a block policy and it recovered the cost of the insurance from the tenants through insurance rent.
Unbeknown to Picturehouse, the landlord had asked its insurers to pay its broker’s commission.
In doing so, the insurance premium was increased to take into account the broker’s commission. The landlord then passed on the cost of the increased premium to Picturehouse through the insurance rent. Picturehouse would pay the insurance rent (along with other tenants), and the landlord would take the commission.
The tenant noticed that the landlord had been charging the tenant the insurance broker’s commission and brought a claim arguing that the landlord could not recover these sums under the terms of the lease.
The terms of the lease said that the landlord could charge insurance rent, which was to be calculated as the “premium payable …for keeping the Centre insured”.
The Court concluded that the landlord could not recover the commission as part of the insurance rent. The landlord in this case had to refund significant sums to the tenant.
Key Takeaway: Check the Lease and Seek Clarity
This case is a warning for all landlords and tenants to check the wording of the lease.
Each case turns on its own facts, and it is important to ensure that the sums being charged to the tenant can be charged pursuant to the terms of the lease. If landlords want the ability to charge for commissions retained by them this needs to be contractually agreed.
Many tenants will be unaware that landlords were earning commissions in this way and would be well advised to check the terms of their lease and ask for information from their landlord on what the sum they are being charged includes.
It is clear from this case that tenants may well have a claim against their landlord to recover any sums that the landlord is not contractually entitled to charge for under the terms of the lease.
Contact Our Property Litigation Lawyers
If you are a landlord or tenant and are concerned about the recovery or payment of insurance rent, our specialist Property Litigation Solicitors are here to help. We can review your lease terms, advise on your legal position, and support you in resolving any disputes efficiently and effectively.
0161 941 4000
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Jennifer Hartley
Associate
Jennifer qualified as a solicitor in January 2020 after completing her training with a specialist real estate firm. She joined Myerson upon qualification and has since become an integral part of the Property Litigation team, applying her expertise to a diverse range of contentious property matters.
Her practice covers a broad spectrum of issues, including TOLATA claims, residential and commercial landlord and tenant disputes, lease renewals, forfeiture, and advising on the right of first refusal. She also regularly advises on lease extensions and enfranchisement matters, guiding individuals and property owners through often complex statutory processes.
About Jennifer Hartley