London Trocadero (2015) LLP v Picturehouse Cinemas Limited & Others [2025]
This judgment handed down on 23 May 2025 is likely to have wide impacts on both landlords and tenants. The main takeaway point from the case relates to insurance rents, specifically the time when a landlord is paid a “Landlord Commission” when obtaining an insurance policy.
Shockingly, expert evidence in the case suggests that tenants may commonly be being overcharged insurance rent by as much as 60%.
The facts of this case demonstrated that the landlord was able to obtain an additional profit from the tenant through the re-charging of the “Landlord Commission”, but the judge found the tenant was not contractually due to pay such charges. This case is analogous to the highly topical undisclosed commission cases prevalent where there is motor finance, energy brokers, financial services and PPI.
The background
The Claimant, London Trocadero, has owned the multi-level entertainment complex in the heart of London’s West End, known as The London Trocadero, since 2015. The Defendant, Picturehouse Cinemas Limited, occupied part of the complex as a tenant under two leases.
It is standard practice in multi-occupied buildings for the landlord to be responsible for insuring the building, usually done by way of a block policy with a right of recovery from each of the tenants in the building, which is what Trocadero did in this case.
It is also standard practice for insurance brokers to recover part, or all, of their fee through the commission payable when a policy is taken out. Brokers are at liberty to share that commission with others. In this case, Trocadero arranged with the broker for an increased commission (35%) to be charged. The broker kept the standard level of commission, and the additional amount was passed back to Trocadero as “Landlord Commission”.
The expert evidence in the case suggested that “Landlord Commission” up to 37.5% was “not usual”. This suggests that landlords obtaining a kickback in the guise of a “Landlord Commission” is commonplace.
Picturehouse’s lease required, at clause 3.6.1(a), it to pay: “a proportionate part of the equivalent amount assessed … as being payable by the Superior Landlord by way of premium for keeping the Centre insured for an amount … necessary to cover the full costs of rebuilding or reinstating the Centre against loss or damage by the Insured Risks…”.
Picturehouse consistently paid all insurance rent demanded from 2015 to 2023 but a dispute arose regarding other charges claimed by Trocadero and the interpretation of Picturehouse’s lease.
Trocadero and Picturehouse disagreed on 3 main points:
- Is the “Landlord’s Commission” part of the insurance premium payable under the lease?
- Has such a “Landlord’s Commission” been explicitly agreed upon in the lease terms?
- Are Trocadero’s charges, including the 35% commission fee, valid and enforceable?
But what did the Judge say?
Trocadero’s interpretation of the lease to include payment of the “Landlord’s Commission” was unreasonable. The insurance provisions in the lease permitted the landlord to recover the true amount payable to insure the building. This would be the broker’s standard commission fee. The insurer would have been willing to insure the building without the additional commission which was then paid to Trocadero.
The Lease Code 2020 provides that landlords should give tenants the benefit of any premium discounts secured through the placing of a block policy. It does not however place any restrictions on “Landlord Commission”, other than to require a landlord to disclose any commission it receives to the tenant. This is the key point.
In this case, Picturehouse was successful by pursuing a claim against Trocadero based on the remedy of “unjust enrichment“, i.e. that Trocadero had been unjustly enriched at the expense of Picturehouse. This is known as a remedy in “restitution”. Trocadero was therefore not entitled to recover the 35% commission paid. Trocedero is required to repay Picturehouse c. £700,000 which relates to “Landlord Commission” it hadpaid since 2015.
As at today’s date, we do not know whether Trocadero intends to appeal the decision. The Judge also ordered a further hearing to address consequential matters related to set-off claims between the parties.
Comment from Tyr
| POINTS TO NOTE… | |
| … for Landlords | … for Tenants |
| Are you actually entitled to charge your tenants a “Landlord Commission”? | Is your landlord actually entitled to charge you a “Landlord Commission”? |
| Have you provided your tenant with disclosure on the charges you are claiming? | Do you have visibility on the charges your landlord is claiming from you? You are entitled to have disclosure. |
| Ensure your relationship with an insurance broker is an arms-length negotiation. | |
| If you are reading this and have questions in relation to any of the above points, please do get in touch! | |
This judgment emphasises the importance of clear contractual obligations and the need for landlords to adhere to such obligations and service provision commitments set out in a lease. The judgment also highlights the complexities involved in landlord-tenant relationships, particularly concerning insurance premiums and associated commissions.
How Tyr can help you?
Restitution cases are notoriously fact sensitive. The question of whether a landlord is able to charge “Landlord Commission” is answered purely by careful consideration and interpretation of the lease. This is not a ‘one size fits all’ situation.
At Tyr, we have Property Litigation experts on hand to review and advise, both landlords and tenants, on the parties’ obligations included in a lease. We also have Commercial Property experts available to carefully draft your leases at the outset to reduce the risk of interpretation disputes. Both of these services aim to ensure long lasting landlord and tenant relationships for our clients.
Contact details
Laura.Salvati@tyrlaw.co.uk + 44 113 512 1046 + 44 7534 121 765
Sallyanne.Phillips@tyrlaw.co.uk + 44 113 323 7758 +44 7946 182 172
Eleanor.Tordoff@tyrlaw.co.uk +44 113 322 8240 +44 7908 190 547
