The Daily Telegraph is reporting that Purplebricks could face a bill of as much as £30m “after it put thousands of landlords at risk of being fined.”
Purplebricks disputes the figure, saying it's more likely to be a maximum of £9m.
The newspaper says: “It is understood that since the online estate agent was founded in 2012, it has failed to properly serve legally required documents to tenants explaining their deposits have been put into a national protection scheme.
“These documents, known as prescribed information, must be given to tenants within 30 days of the deposit being paid. Failure to do this means the tenant can claim back up to three times the value of the money.
“Tenants have a six-year limitation period in which to make a claim against either the agent or their landlord. A source with knowledge of the business said Purplebricks' historic liabilities could be as high as £30m, assuming everyone eligible to make a claim did so.
“It comes as Purplebricks fights to recover from a steep fall in its share price, which has dropped 70pc since the start of the year. The company - which currently has a market value of about £97m - warned last month that profits would suffer because of a fall in homeowners instructing it to sell their properties. It currently manages approximately 6,000 tenancies.”
You can see the full story - including quotes from a legal firm representing claimants, and a response from Purplebricks itself - here.
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What about agents claiming three times for large sums of rent arrears that have not been cleared? Or even having the powers to claw the full amount back?
The No win No Fee bottom feeders will go after the landlords who, in turn, will go after PB. Commisery all round.
Agree ambulance chasers everywhere. I've adopted a positive response, sell up and give all those little darlings the chance to pay a mortgage. They can check their own gas and electrics (joke) and explain to Halifax how they expect them to pay for their little rug rats Christmas presents because they cant afford the December rent. Sorry I mean mortgage. It's a liberating thing to know your leaving this industry and can say what ever you want.
They will have to put a provision in their accounts for the £30m come what may, and all this continued and future publicity makes it more and more likely they are going to need to use it all. Writing to all their tenants wasn't the smartest move either.
As much as I'd like to revel in some schadenfreude here, the real story is that a basically honest agent and landlords are penalised for failing to jump through legislative hoops whilst the real rogue agents and landlords remain untouched
It's nearly Christmas. Feel free to revel as much as you like.
This is likely to be true of lots of councils and housing associations. Look at Norwich council ! Also Prospective teants are always telling me of living near to a tenat from hell, when in social housing. Essentially these social landlords have abeing policy of too powerful to sue.
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