Part 4 - Regulation of leasehold Section 59: Limitation on ability of landlord to charge insurance costs
Section 59 inserts new Sections 20G, 20H and 20I into the Landlord and Tenant Act 1985. These provisions prevent excluded insurance costs from being charged in a variable service charge and create a new right to claim damages through the Tribunal when a tenant considers that these excluded insurance costs or related insurance costs have been charged.
	Section 20G defines excluded insurance costs as those that are linked to placing and managing insurance and which provide an incentive for those placing and managing the insurance to enter in a particular contract, for instance remuneration from the broker.
	Section 20G provides that excluded insurance costs cannot be charged or else the service charge is not to be considered valid and payable by tenants. The only payment that can be charged is the general premium for the building or a "permitted insurance payment" which will be set out in regulations. The intention is that the permitted insurance payment will cover the transparent insurance handling fee which can be charged for work to place or manage the insurance, so long as the cost is commensurate with work and time undertaken.
	Section 20H gives the Tribunal powers to award tenants damages in cases where the tenant has paid any excluded insurance costs or any separate fee that is attributable to any excluded insurance costs. The damages will be ordered to be paid by the landlord or the person that has benefitted from the payment of the prohibited amount. The damages are capped at an amount that is three times the amount of the excluded insurance cost. In England, the Tribunal will be the First-tier Tribunal and in Wales it will be the Leasehold Valuation Tribunal.
	Section 20I outlines the right of the landlord to obtain costs of a permitted insurance payment. This is for cases where the lease may be constructed in a way that makes it unclear whether the leaseholder is liable to pay the permitted insurance payment.