In Cos Services Limited v Nicholson and Willans this year, leaseholders challenged the reasonableness of a block insurance policy put in place by their landlord which cost over £12,000 a year.
The Upper Tribunal (part of the Court system to determine service charge disputes) agreed that the cost was not reasonable after the leaseholders obtained comparable insurance premium quotes for between £2,000 and £3,000 per year.
The ruling meant that the landlord couldn't recharge the premium to the leaseholders and now has to pay the premium themselves.
It is therefore important for landlords to continue to check that they are getting value for money when spending their leaseholder's money. Don't just rely on the recharge clause in the lease and expect the leaseholder to pay.