Premium Finance

It pays to learn, doesn't it? Not just from your mistakes; many a time it's about learning new things from scratch.

Property Sparrow is not embarrassed to tell you that she has only just learnt what premium finance means. As a leaseholder she is well aware that freeholders are often unwilling to explain what they have included in the service charge accounts. Over the years she has found that it pays to read every line of the bill and ask them questions about what they are charging for and how they have calculated the amount due per flat. Sometimes the charges are wrong and there are refunds to be had.

'Premium finance' has appeared as an entry on one of Property Sparrow's service charge accounts every year since 2008. She's never given it any thought, assuming it was something to do with accountancy fees. Recently, however, and thanks to wikipedia, she has learnt that this is another item that can lead to a refund. It's a loan facility that freeholders can use to pay the insurance premium on a block of flats.

It's taken about six weeks for this particular freeholder to concede that those leaseholders who pay their service charges promptly are entitled to a refund. Naturally, it didn't occur to the freeholder to spell this out to the leaseholders back in 2008; the refunds have been sitting in the freeholder's bank account. Nevertheless, Property Sparrow received, with thanks, a cheque for £42.82 in this morning's post.

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