The Leasehold and Freehold Reform Act 2024 is shaking things up – and for good reason. For far too long, leaseholders have been left in the dark when it comes to the true cost of their building insurance. Hidden commissions, inflated premiums, and a lack of transparency have all contributed to a system that hasn’t always worked in leaseholders’ best interests. 

But change is coming – and Levels Property Management is ready. 

What’s This Consultation All About? 

The government has launched a consultation to help shape secondary legislation under the new Act, focusing on one key issue: insurance commissions.

Historically, freeholders and property managers have arranged buildings insurance and received a cut (in the form of commission) from the broker. These costs – often significant – are passed to leaseholders as part of their service charge, with little visibility or control. 

The consultation proposes to: 

• Ban commissions being passed on to leaseholders.
• Introduce a new “permitted insurance fee” – a fair, transparent charge reflecting actual work done by managing agents or freeholders.
• Ensure leaseholders have the right to see what they’re paying for, and to challenge it under the Landlord and Tenant Act 1985. 

Why This Matters 

Following major events like the Grenfell Tower tragedy, insurance costs for multi-occupancy buildings have soared. Between 2016 and 2021, premiums increased by 125% – and with that, so did the commissions pocketed by some parties. In many cases, over half of the broker’s fee was passed to the freeholder or managing agent, with no clear justification. 

This system hasn’t just been expensive – it’s been opaque. Leaseholders have often paid for insurance services they didn’t ask for and couldn’t scrutinise. 

Where Does Levels Property Management Stand? 

At Levels, we’ve always believed in doing things differently. 

Here’s how we stay ahead – and how we ensure our clients aren’t caught out by outdated, unfair practices: 

Transparent Fees 
We don’t hide behind ambiguous service charges or vague admin lines. Our insurance-related costs are clearly broken down, fully explained, and easy to trace. Clients know what they’re paying for – and why. 

No Unjustified Commissions 
We don’t accept backdoor payments, excessive commissions, or broker kickbacks. We believe in earning trust, not profiting from opacity. 

Client-First Approach 
Every insurance policy we source is chosen with your best interest in mind – not ours. We look at cover, value, claims handling, and relevance to your building, not how much commission we could make from it. 

Staying Ahead of Regulation 
We keep fully up to date with all government reforms – including the current consultation. In fact, we welcome the move to permitted fees and proactive disclosure. It’s a change the industry needs, and one we’re proud to already align with. 

Why This Reform Could Finally Change the Game 

The permitted insurance fee proposed under the new Act will: 

• Ban commissions being bundled into insurance premiums.
• Ensure any fee charged is fair, reasonable, and transparent.
• Be subject to challenge under existing tribunal systems.
• Force managing agents and freeholders to justify costs and disclose insurance policy details to leaseholders. 

This is more than a shake-up – it’s a major step forward in rebuilding trust between leaseholders and those who manage their homes. 

Final Thoughts 

As the consultation continues through 2025, Levels Property Management will be following closely – not just to stay compliant, but to help shape a more transparent, fairer future for leaseholders. 

If you’re a client or leaseholder wanting to better understand how your insurance fees are managed – or if you just want reassurance that you’re not paying hidden commissions — we’re here to help. 

At Levels, we don’t just follow reforms – we live by them.