Landlord Commission and Insurance Rent: A Wake-Up Call for Commercial Landlords

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Commercial landlords should take careful note of the High Court’s recent decision in London Trocadero (2015) LLP v Picturehouse Cinemas Ltd and others [2025] EWHC 1247 (Ch), which has significant implications for how landlords recover insurance costs from tenants under commercial leases.
Background
In this case, the landlord, London Trocadero (2015) LLP, arranged buildings insurance for the Trocadero Centre (a large, mixed-use commercial property). The landlord passed the gross insurance premiums on to its tenants as “insurance rent”, as permitted under the leases. However, the landlord (through its managing agent) had also negotiated substantial commission rebates from its brokers – up to 57.2% of the gross premium in one year – which it retained.
The tenant, Picturehouse Cinemas Limited, disputed its liability to pay insurance rent on the basis that it should not be required to fund commissions that were ultimately rebated to the landlord.
The Legal Issue
The dispute centred on whether the lease wording – specifically, the obligation to pay insurance rent based on the “premium payable by [the landlord] for keeping the Centre insured” – permitted the landlord to recover costs that were effectively reimbursed via commission.
The High Court’s Decision
The High Court found in favour of the tenant on this principal issue. Key findings include:
Implications for Commercial Landlords
This decision represents a clear judicial statement that:
While the Court recognised that commission rebates were common in the market, it made clear that standard lease terms do not entitle landlords to benefit at the tenant’s expense without explicit agreement.
Practical Takeaways
Commercial landlords should:
For further guidance on drafting or reviewing insurance rent provisions, or to discuss the implications of this case in the context of your portfolio, please contact our Real Estate or Real Estate Dispute Resolution team.
This article was written with the assistance of Peter Wilson, Solicitor, Real Estate Dispute Resolution.
The Landlord's Commission was...not "for … keeping the Centre insured"... it was "for" providing the Landlord with an opportunity to profit at the Tenant's expense.