Overcharged insurance rent on commercial lease: London Trocadero (2015) LLP v Picturehouse Cinemas Limited

The case of London Trocadero (2015) LLP v Picturehouse Cinemas Limited [2025] EWHC 1247 (Ch) considered insurance commissions charged by the landlord, Criterion Group, to its tenant, Picturehouse Cinemas. The key issue being whether the landlord was entitled to include commissions paid to brokers as part of the insurance rent charged to the tenant.

Background

Picturehouse, a tenant in the London Trocadero, challenged the insurance premiums charged by Criterion Group. A practice had developed where the landlord had inflated insurance premiums by including commissions paid to brokers.  In turn, those commissions were passed to the tenants as part of the insurance rent. This practice resulted in tenants paying much more for insurance than necessary, with the landlord significantly benefiting financially from the inflated premiums.

Court’s findings

The High Court ruled in favour of Picturehouse, determining that the landlord was not entitled to charge these commissions as part of the insurance rent. The Court found that the inclusion of broker commissions in the insurance premiums was not justified under the terms of the lease. The judgment highlighted that the landlord’s practice of inflating insurance premiums was not transparent and unfairly burdened the tenant with additional costs.

Outcome

Criterion Group was ordered to repay the overcharged amounts to Picturehouse.

This decision is significant for commercial landlords and tenants as it underscores the importance of transparency in insurance charges. The ruling may prompt other tenants to review their leases for similar issues and challenge any unjustified insurance charges. The case sets a precedent that landlords cannot arbitrarily inflate insurance premiums by including broker commissions without express wording under a lease. There is clear potential for tenants to seek redress if they believe they have been unfairly charged, reinforcing the principle that landlords must act in good faith and within the bounds of the lease terms.

Stuart Nevin is an Associate Director in the Real Estate Disputes team at Cleaver Fulton Rankin.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Dispute Resolution team at Cleaver Fulton Rankin for further advice or information.

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