Category Archives: Legislation

Purplebricks and its finance company have liabilities in perpetuity – Emoov collapse should sound alarm-bells for investors and business partners

“Consumer watchdog Which says 5000 sellers could be affected by the collapse of Emoov” https://www.propertyindustryeye.com/consumer-watchdog-which-says-5000-sellers-could-be-affected-by-collapse-of-emoov/ Source Property Industry Eye (PIE)

Purplebricks share price continues to nose dive
Purplebricks share price continues to nose dive

The collapse of eMoov into administration again demonstrates the fundamental flaw in the call-centre estate agency business model but, it also highlights a severe problem for Purplebricks and the few other remaining call-centre agents that has been alluded to before but, in a different context. Their contract binds the companies to deliver the contracted service in perpetuity.

As the PIE story demonstrates, Purplebricks* consumers who have paid for a service upfront or, deferred payment, are now entitled to that cost being refunded or, tfor the customers to enforce the contract for eternity. 

Given the consistent and dramatic share price fall over the past year, its continued ‘shyness’ in substantiating many of its bold claims (88% listing to sold by Michael Bruce CEO on Radio 4 MoneyBox) and, its inability to provide a shred of evidence to repudiate Anthony Codlings damning Jefferies report which stated that Purplebricks sells (completes on) at most 51%** of all of its clients that it takes circa £1,300 from on average.

This means that Purplebricks has an exponentially increasing exposure to clients who can contractually demand their money back/ enforce the marketing and support package in perpetuity (allowing for ever increasing Rightmove charges and LPE retainers etc. Either Purplebricks and its finance company must hold sufficient and ever increasing cash reserves to be able to meet this contingency or, they face a potential charge of selling services they do not have the ability to provide as contracted.

See also

https://blog.pdq-estates.co.uk/2018/05/08/are-purplebricks-set-to-repay-millions/

https://blog.pdq-estates.co.uk/2017/12/12/purplebricks-and-the-case-of-the-regulators-who-wont/

https://blog.pdq-estates.co.uk/2017/08/24/attempted-intimidation-by-a-plc-or-fair-comment/

*Stock market ticker PURP #PURP Social media @PurplebricksUK @purplebricksAUS @PurplebricksUSA

**believed to be a ‘safe’ conservative figure to keep Jefferies lawyers happy

“Really?!…. I don’t need planning permission to put a stunning, modern mobile home in my garden?!”

HabitatDesignCollection-MackintoshPavilion-1.jpg

Picture credit – Habitat Mobile Homes Ltd 

Use of a mobile home in the garden of a residential house.

If you want to site a mobile home in a field or an area outside of a garden you will need to apply for planning permission.

Siting a mobile home in a garden does not directly require planning but we advise applying for a ‘Certificate of Lawfulness’ from the Planning Authorities. It’s surprisingly true that laws relating to touring caravans, the type you tow behind a car, also apply to mobile home and static caravans: a type that can be significantly larger and suitable for year-round residential accommodation.

A caravan, be it a touring or static caravan or a large twin-size mobile home, is regarded as an article of movable personal property known as a ‘chattel’ and there is no public law preventing one being kept in someone’s garden, but there are Laws that regulate the ‘Use’ of land. It is NOT a Permitted Development Right. Siting a Caravan is NOT ‘Development’ whether permitted or otherwise. If the proposed mobile home falls within the criteria of use, conformity and location, then the situation is outside of planning control and approval from the Authorities is not needed.

We do, however, advise that in all cases a Lawful development Certificate is obtained for peace of mind. A lawful development certificate (LDC) is a statutory document confirming that the use, operation or activity named in it is lawful for planning control purposes. A mobile home will not require planning permission based on the follow criteria:

Location 

The caravan must be in the ‘curtilage’ of a dwelling house. This is the drive or garden, not adjoining paddock land, for example.

In James v Secretary of State for the Environment 1990 it was held that there are three criteria for determining whether land is within the curtilage of a building, namely:

  1. physical layout
  2. ownership, past and present
  3. use or function, past and present

 Definition of a ‘Caravan’

The actual structure must conform to the legal definition of a ‘caravan’ described in the Caravans Sites and Control of Development Acts 1960 and Associated Articles.

Appeal Decision by the Secretary of State (Erewash Borough Council 2002) determined that there are 3 tests to be applied to the park home:

  1. construction test
  2. mobility test
  3. size test

Use

The use must be incidental to the use of the house, meaning used in conjunction with. There are 4 accepted ‘incidental’ tests, reported to the House of Commons (Hansard, for 22 November 2005) as arising from relevant case-law. These are:

  1. the relationship between the respective occupants
  2. the relative size of the house, its garden and the caravan
  3. the relative scale of accommodation in the caravan and the house
  4. the degree to which the caravan is functionally connected to and subordinate to the use of the dwelling house

    Mobiles Homes in Gardens

    Planning Permission for Mobile Homes in Gardens

    OVERVIEW

    A caravan, be it a touring or static caravan or a large twin-size mobile home, is regarded as an article of movable personal property known as a ‘chattel’ and there is no public law preventing one being kept in someone’s garden, but there are Laws that regulate the ‘Use’ of land and ‘Development’.

    The siting of a caravan within the garden of a property does not require express consent provided a ‘material change of use’ or ‘Development’ has not occurred. If a caravan is parked in a drive or sited in a garden and used by members of the household in connection to the enjoyment of the house or as extra accommodation for visiting guests, provided the occupants continue to use the facilities of the house, then the siting of the caravan has not changed the ‘use’ of the land. However, if for example a caravan is sited in a garden and used as business premises, separately rented or used as a primary independent dwelling, with no relation to the main house, the local planning Authority could decide that an unauthorized ‘material change of use’ has occurred, for which planning permission will be required.

    The most important element is location. The location has to be in the direct garden, it can’t be on paddock land, or scrubland that is some distance from the house, even if the location is within the property boundary it really needs to be in the direct garden.

    A mobile home can be used in a garden without planning but you will need to justify how the use of the caravan supports the use of the house and how it will not become a separate or independent dwelling. For example the people who sleep and wash in the mobile home will use the cooking facilities of the main house. The structure must also be located in the actual garden, not surrounding land. Caravans, including mobile homes up to 65x22ft, can be sited in the direct garden of a house without planning permission if they are used by members of the household as additional living space not as independent accommodation.

    Key Factors

    There are three key factors to determine whether siting a caravan in a garden will not require planning permission. They are; the location of the caravan is garden, the caravan itself conforms to the legal definition, the use of the caravan is functionally link to the house.

    Location

    The caravan must be in the ‘curtilage’ of a dwelling house. This is the drive or garden, not adjoining paddock land, for example.

    In James v Secretary of State for the Environment 1990 it was held that there are three criteria for determining whether land is within the curtilage of a building, namely:

    1. physical layout
    2. ownership, past and present
    3. use or function, past and present

    Definition of a ‘Caravan’

    The actual structure must conform to the legal definition of a ‘caravan’ described in the Caravans Sites and Control of Development Acts 1960 and Associated Articles.

    Appeal Decision by the Secretary of State (Erewash Borough Council 2002) determined that there are 3 tests to be applied to the park home:

    1. construction test
    2. mobility test
    3. size test

    Use

    The use must be incidental to the use of the house, meaning used in conjunction with. There are 4 accepted ‘incidental’ tests, reported to the House of Commons (Hansard, for 22 November 2005) as arising from relevant case law. These are:

    1. the relationship between the respective occupants
    2. the relative size of the house, its garden and the caravan
    3. the relative scale of accommodation in the caravan and the house
    4. the degree to which the caravan is functionally connected to and subordinate to the use of the dwelling house

     

    Different Types of Caravan

    The legal definition of a caravan covers a wider range of structures than conventional touring caravans. A ‘caravan’ is any structure designed for human habitation that is capable of being transported. The term ‘caravan’ applies to touring caravans, motorhomes, static caravans and twin-unit mobile homes and park homes.

    Touring Caravans. These are the ones we see towed behind cars. Designed for occasional recreational use. They are built to BS EN 1645 and must meet the requirements for the construction and use of road vehicles.

    Motor-caravans incorporate the living accommodation similar to that of a touring caravan onto a motor base vehicle and are therefore designed specifically for touring. They are built to BS EN 1646 and must be road legal.

    Static caravans, also called holiday caravans and single units, are designed for recreational use not yearlong residential accommodation. They are not directly towed on roads but transported in one complete section on a HGV trailer. They are built to BS EN 1647.

    Park Homes refers to single and double unit caravans designed for residential use and built to BS 3632.

    Mobile homes refer to caravans that are designed for residential use and are not to be directly towed on roads by a vehicle. They do not have to meet any BS standards but they must meet the mobility and size test and additionally the construction test for twin units.

    Common Questions

    If I couldn’t drive a small car to my back garden, how would a massive 20 x 6 meter 5 bedroom mobile home be moved in and out?

    Mobiles Homes can be assembled onsite from prefabricated panels and the mobility off-site and down a non-specific road is hypothetical.

    This is best answered in ‘The Appeal Decision; Brightlingsea Haven Limited v. Morris 2008’ where it stated ‘It is the structure that must conform to the law not the means of access to where the structure actually is, and whether it may have difficulty in reaching a road.

    It is now common practice to build or assemble caravans in hard to access back gardens. The structure must remain movable and capable of transport down a hypothetical road, even if access to a road may require craning over buildings or complicated procedures. The structure need not have direct access to a road to be deemed a ‘caravan’. In terms of construction, Mobile Homes can be assembled onsite from many prefabricated pieces so long as they conform to the construction and mobility test. Other caravans like touring and static caravans need not meet the construction tests but must remain movable. For large mobile homes it is recommended a kit-form caravan is purchased from a specialist reputable manufacturer as opposed to building one independently.

    Why would I want to live in a Caravan? I’ve stayed in caravans at holiday parks; they look horrible and are freezing cold in the winter!

    Many people think of mobile homes and static caravans as having substandard comfort, dreary designs and paper-thin walls. However, they are not all like this. Modern mobile homes can offer all the luxury of conventional residential living. They can be built to the same insulation values as a normal house and come in a variety of designs and styles.

    How big can a ‘caravan’ be?

    Although the maximum size of a caravan is limited to 20 x 6.8m in the Caravan Sites Acts, it is still considerably large, with enough space for over five bedrooms, toilets, kitchen and living spaces. A caravan can be significantly larger than most buildings capable of obtaining planning approval as annexes.

     Why not just have outbuildings? Homeowners have rights to build outbuildings without planning permission. Why would I consider a Mobile Home?

    Many homeowners are familiar with the ‘Permitted Development Right’ to have sheds and other outbuildings in a garden without the need for planning approval (The Town and Country Planning General Permitted Development Order 2008)
. However, the development rights for outbuildings don’t allow living accommodation and a structure with a kitchen and bathroom is not allowed.

    What’s the most common problem?

    The main problem that occurs with the Local Authorities (if the boundary of the garden and compliance with the Caravans Sites Act is not in question) will be the argument that if the caravan has all the facilities for independent living it is therefor capable of being used as a separate dwelling and a separate planning unit will have been created. Consequently, the use of the land will have changed from a single dwelling or incidental to the enjoyment of the dwelling. However, this argument is not supported by Case Law. All caravans have the facilities for independent living by their very definition. There is no law that states that a caravan with full living facilities constitutes development. This applies more to buildings than caravans. One possibility to overcome this argument is to independently sign an ‘affidavit/statutory declaration’ stating that the use of the caravan will be not be as a separate dwelling.

    What about farmland? Can I put a caravan in a field?

    The answer is yes, but you can’t use the caravan as accommodation. It must be used in association with the use of the land. On farm land the caravan must be used for farming activities, storage or a rest area required by health and safely for workers. It cannot be used residentially as living accommodation without approval because the ‘use’ of the land would have changed from agricultural to domestic and a ‘material change of use’ would have occurred. A mobile home can, however, be used as accommodation for a limited 28 days of the year. There is no clear wording within this law that states the caravan needs to be moved off-site when not inhabited.

    Should the Council be contacted?

    You don’t have to contact the Council but it is recommended, especially in cases of large mobile homes. If all the circumstances are satisfied and Lawful, then you can get a letter of confirmation from the Council, either an informal reply to a letter or via an official Lawful Development Certificate, which involves completing the application documents.

    Why not just apply for planning permission for an annexe?

    Statistically there will be a high chance of refusal. When residential annexes are granted planning permission they are frequently smaller 1-2 bedroom buildings. Mobile homes can be 20 x 6.7 metres and have over 5 bedrooms, significantly larger than a building likely to be granted conventional planning approval. Additionally there is no restriction on style. Planning permission will often require that the style and finish is ‘in keeping’ with the area. Whilst, a mobile home can be finished to your preferred taste.

    Noteworthy Citations

    1- Parliamentary Questions The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister  (Jim Fitzpatrick) 22 Nov 2005 Column 1491. Column 1491-1492  (Extracts)

    This reference is to Parliamentary Questions concerning the use of caravans in gardens by gypsy travellers. In addressing these concerns, the Secretary of State made the following conclusions about the general ‘use’ of caravans in gardens.

    “A caravan is not a building. Stationing one on land is not itself “operational development” that requires planning permission, although associated works such as the provision of infrastructure and hygiene facilities may well be. Under planning law, householders can park caravans in their gardens or driveways indefinitely, provided that no material change of use of land occurs. However, in certain circumstances, the placing of a caravan on land may change the principal use of that land, which would amount to development in the form of a material change of use of land. It is for that reason that the use of land for an occupied caravan generally requires planning permission. A householder is entitled to use caravans as extra accommodation without planning permission, provided that the occupants continue to use the house, for example, the kitchen or bathroom. If, on the other hand, a caravan is there for another purpose not incidental to the enjoyment of the main dwelling, known as the dwelling house—for example, it is inhabited quite separately from, and independently of, the dwelling house—planning permission for change of use of the land would, generally speaking, be required. As it would result in the creation of a new planning unit, such permission may well not be granted in a residential area.”

    “current law allows flexibility for local authorities to determine the merits of any case as to whether the stationing of a caravan or caravans constitutes development requiring planning permission. Examples that might be considered ancillary could include uses such as storage, home office, additional sleeping accommodation and garden shed. A separate residence is clearly not ancillary to the use of the main dwelling house.”

    2- Letter from the Office of the Deputy Prime Minister

    The following extract is taken directly from a letter to a resident’s action group (CW10) from a Planning Policy Adviser at the Office of the Deputy Prime Minister.

    “Each local planning authority has to take a view on whether any particular activity amounts to ‘development’ within the meaning of section 55 of the main Act. There are two types of development—’operational’, such as building or engineering work, and ‘material change of use of land’. A boat or vehicle would be a chattel rather than a building or a structure, so could only be considered as development if it represented a material change of use of land (eg, if someone set up a commercial boat-repair business in what was supposed to be his back garden). Similarly, a caravan, as defined under section 29(1) of the Caravan Sites and Control of Development Act 1960, as modified by section 13(1)(b) of the Caravan Sites Act 1968 is not a building. However, if someone started using one as a self-contained dwelling within the curtilage of a dwelling house the local planning authority would require a planning application for change of use of land. Putting one dwelling into the curtilage of another is always a material change of use.”

    3- Communities and Local Government Circular 01/94 Paragraph 29

    This is a 1994 Communities and Government Circular regarding the use of caravans by gypsies. Although a 2006 paper referring to traveller and gypsy sites has preceded this circular, its general comments on the use of caravans in gardens can still be cited as relevant.

    “A caravan within the curtilage of a dwelling house may have a number of ancillary uses for which planning permission would not be required. For example, it could be used for additional living accommodation, provided that it remained part of the same planning unit as the dwelling house and the unit remained in single family occupation.”

This article was written by and permission given for its’ reproduction by http://habitatmobilehomes.com to whom we are most grateful.

 

“Domestic abuse. It affects everyone”

In my Twitter feed this morning, I received the following link and excellent article about domestic abuse which I share below, along with some thoughts and advice of my own.

Domestic abuse: not just a tenant issue From Inside Housing @insidehousing ABUSE-MIN

The above article is a powerful and pertinent piece that is, statistically, almost certain to affect or have affected everyone at some point in their careers (even if they may be unaware of it) either directly or, via a family member, colleague or friend.

“Domestic abuse will affect 1 in 4 women and 1 in 6 men in their lifetime.”

Every victims’ experience will be unique but there are some common factors they may well experience. It is a deeply humiliating, often terrifying and usually dis-empowering act/ pattern of behaviour perpetrated on the victim that often leaves long-lasting emotional and physical wounds. It happens to men and women almost equally and people in same-sex relationships.

If you recognise the behaviours listed below either as someone on the receiving end of abuse or, as a perpetrator, seek help. It is out there.

Some facts surrounding abuse in the UK

Source ‘Living Without Abuse lwa.org.uk

Domestic abuse:

“Will affect 1 in 4 women and 1 in 6 men in their lifetime

Leads to, on average, two women being murdered each week and 30 men per year

Accounts for 16% of all violent crime (Source: Crime in England and Wales 04/05 report), however it is still the violent crime least likely to be reported to the police

Has more repeat victims than any other crime (on average there will have been 35 assaults before a victim calls the police)

Is the single most quoted reason for becoming homeless (Shelter, 2002)

In 2010 the Forced Marriage Unit responded to 1735 reports of possible Forced Marriages.

In addition, approximately 400 people commit suicide each year who have attended hospital for domestic abuse injuries in the previous six months, 200 of these attend hospital on the day they go on to commit suicide”

What is abuse?

Official UK government definition:

Domestic abuse in a relationship: recognise it

There are different kinds of abuse, but it’s always about having power and control over you.

If you answer yes to any of the following questions, you might be in an abusive relationship.

Emotional abuse

Does your partner ever:

  • belittle you, or put you down?
  • blame you for the abuse or arguments?
  • deny that abuse is happening, or play it down?
  • isolate you from your family and friends?
  • stop you going to college or work?
  • make unreasonable demands for your attention?
  • accuse you of flirting or having affairs?
  • tell you what to wear, who to see, where to go, and what to think?
  • control your money, or not give you enough to buy food or other essential things?

Threats and intimidation

Does your partner ever:

  • threaten to hurt or kill you?
  • destroy things that belong to you?
  • stand over you, invade your personal space?
  • threaten to kill themselves or the children?
  • read your emails, texts or letters?
  • harass or follow you?

Physical abuse

The person abusing you may hurt you in a number of ways.

Does your partner ever:

  • slap, hit or punch you?
  • push or shove you?
  • bite or kick you?
  • burn you?
  • choke you or hold you down?
  • throw things?

Sexual abuse

Sexual abuse can happen to anyone, whether they’re male or female.

Does your partner ever:

  • touch you in a way you don’t want to be touched?
  • make unwanted sexual demands?
  • hurt you during sex?
  • pressure you to have unsafe sex – for example, not using a condom?
  • pressure you to have sex?
  • If your partner has sex with you when you don’t want to, this is rape.

Have you ever felt afraid of your partner?

Have you ever changed your behaviour because you’re afraid of what your partner might do?

If you think you may be in an abusive relationship, there is help available.

English National Domestic Violence Helpline

0808 2000 247

Do I need listed building consent to erect a timber garden shed/ studio?

An interesting discussion/ training session in the office today.

 
A potential buyer wants to erect a wooden studio (large shed) on a property we are selling.
10049121189918
 
The property itself is Grade 2 listed which would normally mean planning permission would be required* however, the land the shed would sit on is not attached to the property or its immediate surroundings but, is accessed via a shared path and a 30 yard/ meter or so walk.
The legal definition of curtilage** suggests to us that the land does not form part of the curtilage of the main property. Accordingly, it does not form part of the listing in our opinion and, so, the shed/ studio will not need planning permission as long as it complies with the other permitted developments. Outbuildings are considered to be permitted development, not needing planning permission, subject to the following limits and conditions:
Please note: PDQ are not lawyers and we have advised the buyer to consult with their legal advisors to verify this opinion and would advise readers in a similar situation to take independent legal advice before proceeding with any actions that may incur cost or time.
If you need advice on a property you are thinking of selling or developing property in Mid or West Cornwall, give us a call or drop us a line below. Before employing any agent, always ask to see their CV. Here’s mine
Director
PDQ Estates Ltd

*References:

Planning Portal

Local Government Lawyer

Pimlico plumbing case could create a flood of claims for Purplebricks

laurel and hardy water gif

However, a lack of clarity leaves the door open for the regulators to continue to shirk their responsibilities and for companies who use the Gig economy to avoid paying tax, worker/ employee benefits and to compete with an unfair advantage against competitors.

Yesterday’s decision at The Supreme Court , whilst being inconclusive in some respects, may well be giving the head office team of Purplebricks PLC and those investors who don’t already hold a short position a few sleepless nights over the coming weeks. Why?

When reading the following, bear in mind that National Trading Standards Estate Agency Teams‘formal position on Purplebricks LPEs’ are that LPEs’ are employed (this is contrary to The Property Ombudsmans’ position who regard LPEs’ as self-employed and to that of HMRC and the FCA).

If you are one of the many Purplebricks “local property experts” (LPEs’) who read my blog (or one of the even larger number of former LPEs’) you may be wondering why, having been sold the idea that you would be earning in excess of £60,000, that so very few do earn anything like that amount according to Companies House.

You may also wonder why, having paid for your own fuel, professional expenses, licenses, insurance etc, that you can’t afford to take time off ill or on holiday. Of course, if you are a worker and not a franchisee, you would be entitled to maternity pay, sickness and holiday pay and, salary at the level you were promised or, at very least, payment at the national minimum wage for all of the hours you’ve worked commission free.

Those LPEs’ who lost their territory or, had to give part of it up to another LPE due to failing to hit targets, whether possibly being classed as a ‘worker’ by this case, means they might now be able to sue the company for unfair dismissal.

Apart from the VAT, data protection, working time directive, national minimum wage and a multitude of workers rights issues NTSEAT also have to now make it clear why, if the LPEs’ are employed as NTSEAT are adamant they are, are NTSEAT facilitating a major PLC to allow it to trade without its employees paying appropriate NI or income tax. Which, if correct, would be a) illegal and b) trading unfairly and within their remit for action.

Investors in and law-abiding competitors of Purplebricks PLC may also draw their own conclusions and seek to make further enquiries, take appropriate positions and, consider discussing this case with their local Trading Standards Office.

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Are Purplebricks set to repay millions?

Laurel and hardy sad gif

Related posts Purplebricks – and the case of the regulators who won’t. Is my agent, local, an expert or even legal?! How do I check? Attempted intimidation by a PLC or fair comment? Purplebricks – What is really going on? Portal juggling – What is it, and why you should care

17/08/2018 – UPDATE: A well-placed Purplebricks*  insider has claimed that after a year of announcing to the stock market that they were partnering with respected review site Feefo the company has received less than 500 verified reviews from customers who have sold (completed). It is also claimed that the average customer rating is lower than the average Purplebricks Trustpilot claimed score.

Given the thousands of listings and the 88%** listing to sold (completion) ratio that Purplebricks CEO claimed, this very low number of completed Feefo reviews and at a lower rating begs a number of rather obvious questions and conclusions.

Purplebricks ratings have been the focus of a number of consumer protection investigations by the BBC and others amid many claims that Trustpilot reviews can be manipulated, falsified and, that Purplebricks staff are heavily incentivised and pressured to ask customers for ratings at the begining of the whole process, rather than at the end when scores might be lower. Claims that Trustpilot and Purplebricks deny.

Purplebricks publicly maintains that all of its Trustpilot reviews are verified but that is clearly not the case as a simple check on the TP website shows (only one review out of twenty was verified on the page we checked today 13.09 17/08/2018)

*stock market ticker symbol # PURP – Purplebricks PLC

**in comparison to the 51% or so of all listing claimed by Jefferies

If you have paid hundreds or thousands of pounds up front to an agent (or been signed up to a loan agreement to defer payment – especially without your knowledge) and have little or nothing to show for it, this article is for you.

If you are an investor in Purplebricks (stock market ticker #PURP ) You may also be a regular visitor to my blog and may also wish to take a close look at the arguments I advance below.

Consumers in the UK are protected by a multitude of laws both civil and criminal. Various bodies are charged to police these and do so with varying degrees of success and ability. Sadly, for a variety of reasons, policing and enforcement often doesn’t happen until a consumer affairs programme, writer, show or journalist picks up the story and brings it to light, in doing, shaming the appropriate authority to act.

Since launching, thousands of home-owners and landlords have signed up and paid out many millions of pounds to Purplebricks PLC (PB) having made a “transactional decision*” to use their services. I.e. having considered the advertising, press statements, news statements and marketing information provided in the press, online by the company, Directors and CEOs’, as well as hundreds of ‘LPEs’ (allegedly ‘local property experts’).

However, a quick glance at PBs’ Twitter feed or Mumsnet on any given day, will show that the hype and claims often don’t match the advertised service.

There are any number of potential points where thousands of members of the public could reasonably make a case to have their upfront fees returned having been potentially misled, however, space and time don’t permit so, I will list what is, p[robably, one of the most contentious.

  • PB repeatedly claim that they sell more, more quickly and at better prices than other agents; most notably by their own Directors, CEO and lawyers

As an investor or a consumer, it is reasonable to believe that if the CEO or Director of a company makes a clear statement that they sell (complete on, not just sold subject to contract) 88% of all they list, then that is what they achieve.

I.e. consumers paying £1,100 on average, up front, can expect to complete on the sale of their home by a buyer introduced by Purplebricks in 88% of cases. Except that, with PB, this claim, seems, at best, rather ‘fluid’.

Michael Bruce, CEO stated it was 88%. Their solicitors stated it was in excess of 90% and Kenneth Bruce, Director said it was in excess of 80%. The current CEO stated to the BBC that they only sold 78% (and even that was subject to contract, not completed sales). Furthermore, independent analysts keep awkwardly placing the listing to sold figure well below that level too. Jefferies, for example, famously describing parting with £1,100 upfront to Purplebricks as “a coin toss”  My own data from 2014 – date just the West Cornwall area date also gives the lie to this figure** by a considerable margin.

Adapted from the Citizens Advice letter “Letter to claim damages for misrepresented goods or services” here


Roy Wilkinson and Sandy James
29 Lode Way
Manchester
MC1 2MA
Karl Keanes
1 Lode Way
Manchester
MC2 3MA

8 May 2018
Dear Purplebricks

Consumer Protection Act

I entered into an agreement with your company on INSERT DATE at a cost of £1,100 plus a further £300 for accompanied viewings which we were told we could defer at no additional cost or penalty.

At the time of purchase, it was indicated by a representative of your company, Michael Bruce, that the service/goods would include:

  1. An 88% chance of selling our home.
  2. That all Purplebricks reviews on Trustpilot were and are verified
  3. I was not signing up to a loan agreement.
  4. All I would normally expect from an estate agent which, I reasonably believed to mean you had high street offices.
  5. My ‘local property expert’ would accompany all viewings and not just a paid helper.
  6. I would save money compared to a high street estate agent
  7. I could use my own solicitors without additional cost
  8. That my LPEs held a nationally recognised RICS or NAEA NVQ level 3 or higher qualification in estate agency with many years of experience and thus reasonably qualified to be classed as a property expert

I have since discovered that none of the above is correct, I therefore feel that the advertising of your service and the contract itself was misrepresented to me. As such, I have no option but to cancel the contract without penalty in accordance with the Consumer Protection Act and request a refund in full by return.

I look forward to your response within 14 days so we can resolve this matter amicably. I also require being advised of my LPEs’ office address (as registered with TPO, HMRC/ FCA etc for redress and money laundering etc.) as I may also wish to take this matter up with The Property Ombudsman Scheme, The Competition and Markets Authority and The Financial Conduct Authority. Thank you.

Yours sincerely

Roy Wilkinson and Sandy James


List to sold 01.01.14 to 04.05.18

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*2.5 Apart from the banned practices (which are banned outright), these breaches have a threshold: the commercial practice will be unfair if it affects or is likely to affect the transactional decision making of the average consumer.7
 ‘Transactional decision’ is defined widely and is not simply a consumer’s decision to use your services or not, or to buy a property or not. It could, for example, be a client’s decision to accept an offer, or a buyer’s decision to enquire about a property, commission a survey or instruct a conveyancer. [para 3.4]
 The ‘average consumer’ is someone who is reasonably well-informed, and reasonably observant and circumspect. For example, an average consumer would pay some attention to documentation given to them, but not necessarily to the small print unless key points in it are brought to their attention. An average consumer would check out publicly available facts for themselves where this is straightforward to do, although what checks they actually make will be influenced by the information that you have given them. [para 3.4]
 The important question is whether your act or omission is likely to have an impact on the average consumer, not an actual consumer (who may be more or less well-informed, observant or circumspect than the average one).
Source: National Trading Standards guidance notes

**Copy of List to sold 01.01.14 to 04.05.18List to sold ratio of 33.3%. Listings to withdrawn for the same period 55%

Purplebricks – and the case of the regulators who won’t.

 

This article follows on from related articles
PURPLEBRICKS – WHAT IS REALLY GOING ON?
ATTEMPTED INTIMIDATION BY A PLC OR FAIR COMMENT?
IS MY AGENT, LOCAL, AN EXPERT OR EVEN LEGAL?! HOW DO I CHECK?

UPDATE 1608/2018 Purplebricks admits hundreds of breaches of Anti Money Laundering legislation “Altogether, the business itself agrees there are 450 properties listed in the last fortnight in July that were not compliant with the law…

In the last few weeks and almost immediately after their last trading statement, Purplebricks listing numbers showed an incredible number of listing anomalies, with thousands of properties suddenly disappearing from the website over the period of a few hours and days and, a significant number of duplicate and quadruplicate listings with differing unique identifier numbers being identified by individuals and public source data from Zoopla/ Rightmove etc.

It is impossible to say with certainty whether this anomalous activity is innocent or an attempt to manipulate figures although the company  have previously admitted to having to ‘audit’ their listings when questioned about re and multiple listings by The Times)

Since my last blog, I have been trying to ascertain why the regulators appear reluctant to do their job. There appears to be an embarrassing game of pass the legislative parcel and a wall of silence between The Property Ombudsman Scheme (TPOS), The National Trading Standards Estate Agency Team (NTSEAT – who oversee the property redress schemes) and the National Association of Estate Agents/ Propertymark (NAEA) who are an estate agency membership organisation and one of the Nationally recognised awarding bodies for the NVQ qualifications in estate agency.

If you want to work as an estate agent in the UK running your own business, even as a franchisee, the law says you must (amongst other things):

  1. Belong to a recognised Government redress scheme as approved by NTSEAT
  2. Be registered for Anti Money Laundering with Her Majestys Revenue and Customs (HMRC – Section 1.9)
  3. Be registered as a Data Controller with The Information Commissioners Office (ICO)**

Failing to comply with numbers two and three are a criminal offence. Failing to be a member of a redress scheme is a civil offence under the 1979 Estate Agents Act.

As previously revealed, Purplebricks PLC failed to register any of their franchisees with an approved redress scheme until June 2016. The Law states that Agents must register with an approved redress scheme, not that consumers must have access to redress however, neither NTSEAT seem keen to take any action despite this apparently clear breach of the 1979 Estate Agents Act and, TPOS were more than happy to take a large number of lucrative registration fees (they are a commercial company, not a government organisation) despite knowing that none of these firms had previously been trading lawfully with no redress and no ICO or AML registration.

Now here’s the first very odd bit.

  • Purplebricks make it clear that all of their franchisees are self-employed.
  • The franchisees are all registered separately at Companies house as independent limited companies (Ltd.)
  • The NAEA compliance team (who take advice from Warwickshire Trading Standards as Primary Authority on such matters) regard all these franchisees as self-employed and, to have individual redress, AML and ICO registration
  • TPOS require all franchisees to register with them as independent companies (as many legitimate franchise firms do)
  • NTSEAT, however, take the formal view that the franchisees are ’employed’ and thus, do not require to be registered for ICO or AML.

NTSEAT, as part of Powys Council, who bid for the taxpayer funded role, initially appeared to be strongly in support of taking action against portal juggling, (rightly) invoking the Fraud Act, Consumer Protection Regulations and Businesss Protection Regulations Act in various press releases and at conferences.

However, after a year with an immense amount of independent data and yet without a single prosecutions and an apparently isolated and unique view on the status of Purplebricks Franchisees (all other franchise firms such as Northwood PLC etc. are all individually registered) it seems that NTSEAT, as part of Powys Coucil do not want to take action against a company that is well-known for flexing expensive litigious muscles.

The NAEA too, are acting rather oddly. Despite having clear rules on membership and transparency etc. they are refusing to answer some rather simple questions or make clear statements about trading legally. They are also very reticent about their relationship with Purplebricks who their MD, Mark Hayward recently publicly praised for their transparency, despite PB PLC being serial offenders on the ASA naughty step and appearing on BBC consumer programs Watchdog, Moneybox and You and Yours for all the wrong reasons. Read more

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