# Leaseholder asks what commission is on the buildings insurance: the 1985 Act request, the FCA broker rules and what to send

> The 1985 Act gives leaseholders an insurance summary in 21 days; FCA rules make the broker disclose commission in pounds. How the two fit together.

- Page to cite: https://aeolookup.com/block-management/buildings-insurance-commission-disclosure-leaseholders-fca-icobs-6a/
- Publisher: AEO Lookup (https://aeolookup.com/)
- Section: Block and property managers, Service charges and arrears
- Published 3 October 2026
- Key fact: We set the five kinds of information ICOBS 6A.7 requires brokers to give on a multi-occupancy buildings policy against the summary a landlord must supply under paragraph 2 of the Schedule to the 1985 Act; the statutory summary covers only part of one of the five (insured amounts, insurer and risks covered) and none of the commission, pricing, quotes or conflicts items. On a £24,000 premium shared equally by 24 flats, a total commission of £4,800 disclosed in cash terms is £200 of each flat's £1,000 share.
- Sources: Landlord and Tenant Act 1985, Schedule, paragraphs 2, 3, 4 and 6 (legislation.gov.uk); FCA Handbook ICOBS 6A.7, rules 6A.7.3, 6A.7.5, 6A.7.6, 6A.7.8, 6A.7.9, 6A.7.11, 6A.7.14 and 6A.7.18, in force from 31 December 2023; Leasehold and Freehold Reform Act 2024 ss 59 and 60 (legislation.gov.uk, shown as not in force); all read 2026-10-03.

Buildings insurance is often the largest single line in a block's budget, and it is the one leaseholders ask about most when the renewal arrives. The question usually comes as "how much commission is in this, and who gets it?" Two sets of rules answer it, and they put the duty on different people. The Landlord and Tenant Act 1985 gives the leaseholder a right to an insurance summary from the landlord. The Financial Conduct Authority's rules, in force since 31 December 2023, require the broker to disclose its commission, and anything it passes on, in pounds.

## What the 1985 Act gives the leaseholder

The Schedule to the Landlord and Tenant Act 1985 applies where a leaseholder's service charge includes an amount for insurance. Under paragraph 2, the leaseholder, or with consent the secretary of a recognised tenants' association, can serve a written notice asking for a summary of the cover. The landlord must supply it within 21 days of receiving the notice. The summary sets out the insured amounts, the name of the insurer and the risks covered. The landlord may send copies of the policies instead.

Under paragraph 3, the leaseholder can then ask to inspect the policy and associated documents, or to be sent copies, again within 21 days. Inspection is free; a reasonable charge can be made for copies. Where a superior landlord holds the policy, paragraph 4 requires the immediate landlord to pass the request up the chain and the answer back down. Failing without reasonable excuse to comply is a summary offence under paragraph 6, with a fine up to level 4 on the standard scale.

The notice will usually arrive at the managing agent's office, and the 21 days run from receipt by the landlord. Diary it on the day it comes in, the same way as a [section 22 request to inspect invoices](https://aeolookup.com/block-management/section-22-request-inspect-service-charge-invoices-reply-template/).

What the statutory summary does not include is any figure for commission. A leaseholder asking about commission is asking for something the 1985 Act does not give them.

## What the FCA rules require of the broker

ICOBS 6A.7 in the FCA Handbook applies to multi-occupancy building insurance. The broker must give the information to its customer, normally the freeholder or the management company, as soon as reasonably practicable after the policy is placed and at each renewal. The customer is expected to pass it to the leaseholders. The broker may send it to leaseholders directly where it has their contact details, and must do so where it learns a leaseholder has not received it (rule 6A.7.3).

There are five kinds of information:

| ICOBS rule | What the broker must provide | In the 1985 Act summary? |
|---|---|---|
| 6A.7.5 | Summary of cover: insurer, type of insurance, main and excluded risks, sum insured, excesses, duration | Partly: insured amounts, insurer, risks covered |
| 6A.7.6 | Pricing: the total premium, with insurance premium tax and VAT, and how it is allocated across buildings or dwellings | No |
| 6A.7.8 and 6A.7.9 | Remuneration: total commission received by the broker and any associate, and any payment or incentive given to a third party, including the freeholder or anyone acting for it, in cash terms (estimated if need be) | No |
| 6A.7.11 | Placement: how many alternative quotes were obtained and why the chosen policy met the customer's and leaseholders' interests | No |
| 6A.7.14 | Conflicts of interest, such as holdings in an insurer and whether the broker acts for the customer or the insurer | No |

Rule 6A.7.18 requires the broker to answer queries from the customer or a leaseholder promptly.

Two points matter to a managing agent. First, the remuneration disclosure includes money paid to anyone acting for the freeholder. If the agent receives a share of the commission, or a fee from the broker, that sum is disclosed to the leaseholders in pounds. Second, the duty to pass the pack on falls on the customer, and in practice the customer's agent does the posting. A pack that sits in the office inbox defeats the rule and invites the complaint.

## A worked example

A block of 24 flats, each paying an equal share, renews at a total premium of £24,000. Each flat's share is £1,000. The broker's disclosure shows total commission of £4,800, of which £1,200 is paid to the managing agent for insurance administration. In cash terms, £200 of each flat's £1,000 is commission, and £50 of that reaches the agent. Where the leases split costs unequally, the [apportionment calculator](https://aeolookup.com/block-management/service-charge-apportionment-calculator-per-flat/) turns the totals into each flat's figure.

Those are illustrative figures, not a market rate. The point is that a leaseholder who has the broker's disclosure and their own share can work this out in a minute, so the agent should be able to as well, and should be ready to say what the £1,200 pays for.

## What to send when the question arrives

1. Within 21 days of a written request: the paragraph 2 summary, or copies of the policies.
2. With it, or as soon as you have it: the broker's ICOBS 6A.7 disclosure for the current policy year. If you do not hold one, ask the broker for it in writing.
3. If the agent receives any part of the commission or a fee from the broker: say so plainly, give the amount, and say what work it covers.
4. If the leaseholder disputes the cost: the reasonableness test in section 19 of the 1985 Act still applies to insurance, and the tribunal can hear it.

## What the 2024 Act will change

Sections 59 and 60 of the Leasehold and Freehold Reform Act 2024 will limit what can be recovered for arranging insurance to "permitted insurance payments", described in regulations, and add new information duties to the Schedule. On 3 October 2026 neither section is in force; our guide to [which parts of the 2024 Act have commenced](https://aeolookup.com/block-management/leasehold-and-freehold-reform-act-2024-what-is-in-force-managing-agents/) tracks them. Until then, the FCA disclosure is what shows the leaseholder the commission.

## Where Overlyft ![](https://aeolookup.com/img/d/ours-badge.png) fits

Overlyft can set up an AI Leaseholder Desk to draft the reply to an insurance request, put the 21-day date in the diary and list what is attached, for the property manager to check and send. It does not decide whether a fee is reasonable or answer for the broker's figures.

This is general information for England, not legal or insurance advice.

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General information for UK small firms, not legal, tax or financial advice.