Leaseholder Buildings Insurance Service Charge - Tribunal

Information about the proposed Leaseholder Buildings Insurance Service Charges increase

Latest update: 30 September 2020
The decision of the First-tier Tribunal, Property Chamber – Buildings Insurance (Service Charges) has now been released. To read the full decision please visit our updates and key dates webpage.

Further to the decision of the First-Tier Tribunal on 22nd June 2020, some leaseholders have applied for permission to appeal. The Tribunal is currently considering these applications.

The Council must organise insurance for all its properties, including blocks which include leasehold flats. Leaseholders of Council properties in Kensington and Chelsea are required to pay a service charge to the Council for the maintenance and upkeep of those properties. Part of that service charge includes buildings insurance.

There was a very large increase in the cost of buildings insurance for the year starting 1 April 2018.

Although the Council has agreed to remove any increase that related to the Grenfell tragedy, a large increase still remained. The Council has asked the First-tier Tribunal Property Chamber to decide if it is reasonable to recharge the remaining increase in premium to leaseholders.

Why did the leasehold buildings insurance premium increase so much?

Our insurers Ocaso SA informed us that they had seen a significant and unprecedented loss in the 2017-18 policy year due to the Grenfell tragedy and the leasehold units that were part of the tower. As a consequence, this has caused a major deterioration in the claims history for the policy and an inevitable increase in the premium being charged to leaseholders. The overall increase was 86 per cent which was made up of:

  • 40.41 per cent - recent claims history - to be paid by the Council
  • 31.99 per cent - increase in the sums insured following a review
  • 13.6 per cent - general increases in the costs of buildings insurance

What amount are we asking the Tribunal to decide if it is reasonable for leaseholders to pay?

The Council has decided not to pass on the 40.41 per cent to leaseholders and is only asking the Tribunal to decide if the remaining 45.59 per cent increase is reasonable.

To find out how much you will be billed, view your insurance premium for 2018-19.

What happens next?

The Tribunal issued further directions on 29 March 2019. In accordance with paragraph 4 of the Tribunal Directions the Council has lodged with the Tribunal a full statement of case. The Applicant’s Statement of Case and appended documents can be found at the Tribunal documents and application forms section of this website.  

The Applicant’s Statement of Case and appended documents A1-A30 are available to be read in hard copy between 9.00am and 5.00pm, Monday to Friday, at the following places:

  • Kensington Town hall, Hornton Street, W8 7NX, in the Customer Service Centre: ask at the main reception;
  • The Network Hub – located at 292A Kensal Road, London W10 5BE, at the Customer Reception Area; and
  • The RBKC South Neighbourhood Office on Blantyre Street, Worlds End Estate, London SW10, in the Customer Reception Areas

Find out more about the next steps and key dates.