Introduction to the Dispute
The sharp argument between Picturehouse Cinemas and the landlord of its flagship Trocadero location in central London continues. Last Friday, May 23, Picturehouse received a judgment against the landlord, London Trocadero LLP, for overcharging insurance rent in Picturehouse Central. The landlord now has to repay the cinema operator over 700,000 GBP.
The Landlord’s Response
However, London Trocadero LLP confirmed that they are appealing against the judgment. They stated that many in the industry will be surprised to find out that a "premium" for storing property does not include part of the broker fee that is legitimately shared by insurance brokers. Picturehouse Cinemas refused to comment on the court’s decision.
The Insurance Dispute
The Trocadero rental company is obliged to secure insurance for the entire center and then pass on the costs to its various tenants. Picturehouse Central is a seven-screen cinema with a large inner floor area of 62,000 square feet. Picturehouse made security concerns in the court proceedings and argued that the landlord did not maintain a sprinkler system in the center that would have been effective if a fire had broken out. This meant that their insurance premiums had increased.
Previous Legal Proceedings
The judgment follows previous legal proceedings in which Picturehouse was defeated by London Trocadero. After the COVID-19 pandemic, the landlord successfully took legal action against Picturehouse for non-payment of rent arrears in a claim worth around 2.9 million GBP. The cinema operator had argued that they were not liable for rent during the period when cinemas were forced to close due to the pandemic, but they lost.
Ongoing Disputes
The Criterion group, which owns London Trocadero LLP, has also been in a dispute with another cinema tenant, the Prince Charles Cinema at Leicester Square. A petition with over 164,000 signatures was collected to protest against the landlord’s attempts to "harass" the Prince Charles Cinema when their existing rental contract ends in September 2025.
Community Support
The Westminster Council recognized the Prince Charles Cinema as a valued part of the community and the cultural landscape. It remains to be seen whether the cinema will be identified as a location of community value, which would secure a long-term rental agreement for affordable conditions.
Industry Implications
The insurance judgment is considered significant, with one veteran of the exhibition industry commenting that "landlords have gotten away with massive surcharges" and that this judgment "could open the floodgates for similar claims." A real estate expert noted that the payment of commissions to insurance is not unusual but that the level of the commission, together with the court’s determination on the degree of control of the landlord, was unusual.
Future Prospects
It remains to be seen whether Picturehouse and London Trocadero can resolve their differences. Further legal proceedings between the two parties are underway on the status of the Picturehouse rental contracts in the Trocadero. The real estate expert warned that the judgment may not be in the long-term benefit of tenants, as landlords may not have a legitimate interest in finding the best insurance deals if they do not receive a commission.
