Red door

Please Note: All references to the masculine include the feminine on TPO website and documents.

Press Releases 2009

12 November 2009
Ombudsman expels Estate Agent who failed to safeguard deposit or pay compensation

Residential lettings and sales agency Global Realty has been expelled from The Property Ombudsman scheme (TPO) after failing to pay a £1,600 award made against it.

Ombudsman Christopher Hamer ordered the firm to pay £1,400 to a tenant whose deposit Global Realty had paid to the landlord of the property without ensuring that it was adequately safeguarded under the tenancy deposit protection laws. This action left the tenant having to pursue the landlord (so far unsuccessfully) for monies rightly due to her at the end of the tenancy.

Whilst the Ombudsman recognised that the landlord's behaviour was not Global Realty's responsibility, it was the actions of Global Realty that had severely disadvantaged the tenant and led her into a situation that the agent could have avoided. The Ombudsman made an additional award of £200 for the aggravation, distress and inconvenience experienced by the complainant.

The agency, with offices at 426 Finchley Road, London, NW2 2HY, and 10 Nugent Terrace, St John's Wood, London, NW8 9QB, was given its final warning to pay by Mr. Hamer on September 16 this year but has failed to respond.

'This firm signed up to be voluntary members of the scheme for its lettings activities so was bound to accept the Ombudsman's decision once it was made,' said Bill McClintock, chief operating officer of TPO, who has responsibility for membership.

'The breach of the rules means we have also cancelled Global Realty's membership for its sales activities. It remains registered with TPO at present under the terms of the Consumers, Estate Agents and Redress Act to cover its sales activities but it is regrettable that this company has reneged on its commitment to its clients.

'The Property Ombudsman scheme's disciplinary and standards committee has made it clear that agents who don't honour the Ombudsman's decisions will be expelled and this is the fourth time it has used the sanction for non-payment of an award this year.

'When an agent is expelled, we automatically notify the Office of Fair Trading (OFT) and trading standards officers in the firm's locality and would remind consumers that Global Realty is no longer entitled to display a TPO or OFT logo on its premises.'

End

Notes to editors:

Case summary:

The Complainant was a tenant who brought a complaint to TPO regarding the way the agent had administered the deposit. The tenancy commenced in October, 2007, but there was no provision within the assured shorthold tenancy agreement for a deposit dispute to be referred to a dispute resolution service and the agent had failed to ensure that the deposit was paid into a deposit scheme, thereby breaching their obligations both under the Housing Act 2004 and the TPO Code of Practice.

The tenancy was for a 12 month period but it was apparent, from e-mail documentation provided to TPO, that the landlord agreed, in March, 2008, to release the Complainant early from the agreement, on payment of a sum equivalent to six weeks' rent. After the Complainant had vacated the Property, the agent claimed that the deposit would be forfeit as the Complainant had moved out early. TPO accepted the logic of the landlord's claim to the agreed six weeks' rent (of which approximately £900 was still outstanding) but not the right to forfeit the £2,300 deposit as well.

At the end of the tenancy, the agent, aware that the monies would not be paid into a deposit protection scheme, released the deposit monies, in full, to the landlord, advising that they no longer wished to retain the deposit but that they considered that the landlord was entitled to the same.

The role of TPO was to address the impact on the Complainant of the agent's failure to lodge the deposit with a tenancy deposit scheme. If they had, this issue would have been quickly addressed without the Complainant being left to pursue the landlord through the courts, having already spent months trying to resolve this issue through correspondence.

TPO was persuaded that if the deposit had been paid into a deposit scheme as it ought to have been, and the agent had given the Complainant notice of where it was held, and had given the Complainant an account of monies claimed to be owing when she vacated, this could have been quickly addressed by the deposit scheme and, TPO believed, would have resulted in the Complainant recovering approximately £1,400 (the deposit less agreed rent outstanding). TPO therefore made an award of £1,400 in respect of quantifiable financial loss together with a sum of £200 in respect of the distress, aggravation and inconvenience caused to the Complainant as a consequence of the agent's actions, resulting in a total award of £1,600.

The Property Ombudsman scheme (www.tpos.co.uk) offers a free, independent, and impartial service to members of the public who are dissatisfied with the service provided by an estate agent who is a member of the scheme during the buying, selling, or letting of a residential property. The Ombudsman, Christopher Hamer, can recommend member agents pay compensation of up to £25,000 in any one case.

Any decision made by the Ombudsman is binding on member agents but not on complainants, who are free to reject the Ombudsman's decision and pursue the matter in the courts if they wish.

TPO was founded in 1990 as the Ombudsman for Corporate Estate Agents, so is now in its 20th year of operation. In 1998, it broadened its scope to make it available to all residential estate agents, becoming the Ombudsman for Estate Agents (OEA). From June 2006, the OEA extended its services to Lettings and Property Management agents.

With effect from 1 October 2008, all UK estate agents engaged in residential property sales are required to register with an Estate Agents Redress Scheme that has been approved by the Office of Fair Trading (OFT) and which investigates complaints against estate agents. The OEA (now TPO) was the first scheme approved by the OFT.

For more information, contact Maurice Hardy, PR for The Property Ombudsman, on 01264 771661 / 07831 272220.

21 October 2009
Four calls an hour over lettings problems

Ombudsman reports property sales disputes on rise again, too

The Property Ombudsman, Christopher Hamer, reveals in his latest quarterly report that the number of new cases concerning house sales he is investigating is on the rise again - and he expects the figures to grow still more later this year.

But so, too, are the disputes involving lettings. Consumers in the lettings market are now making 129 calls a week, that's almost four an hour on average, to the Ombudsman's office seeking advice, a significant rise over the 110 a week calling for help during quarter two of 2009 and far beyond the 77 a week this time last year.

Mr Hamer reports he is investigating almost 79 per cent more lettings cases (127) at the moment than he did in the same period, July 1 to September 30, last year (71) although the number of people calling for help about lettings has only risen by 67 per cent to reach 1,679 over the quarter.

Cases under investigation involving sales have risen 17 per cent for the third quarter, from 104 to 122. But reflecting market conditions they are still almost 32 per cent below last year's level (179) while enquiries are down by 36 per cent over the year (966 in 2009, 1,525 in 2008).

'The statistics in this report covering the period 1 July to 30 September 2009 show the continuing trend of increasing lettings disputes referred to my office,' explained Mr, Hamer.

'I have noted, however, a small surge in sales disputes and whilst there has been much talk about the market beginning to pick up, if that is true it will be some months yet before that has an effect on my workload.

'Trends in the market are mirrored in the numbers of cases that I am asked to decide about three to four months later so any actual increase in activity in the market will become apparent in my workload towards the end of the year.'

The principal causes of disputes over lettings arise when agents are alleged to have failed to make adequate checks of tenant references, not explaining that holding deposits are forfeit if the tenant does not go ahead with renting the property, and inspection visits not being frequent enough to prevent deterioration of the property.

With regard to sales, complaints have arisen from sellers who have been asked to pay for a Home Information Pack when the property has not sold and home owners who have become liable to dual fees after switching agents when the market was slow.

Related to this second point, Mr. Hamer reports he is also getting calls from estate agents complaining about the behaviour of other agents who are making unsolicited approaches to sellers who already have their properties for sale or to let, widely known as 'touting'.

He adds that the quantity and format of 'flyers' put out by agents, whether targeted at a district, street, or individual addresses, could be an irritation to occupants. To comply with the Code of Conduct issued by TPO, any material should also fully explain to property owners that there is the risk of a double liability to fees if they are currently, or have been, selling their property through another agent.

Any consumer dissatisfied by such an approach can ask the Ombudsman to intervene if the agents involved cannot resolve the complaint. However he has no power to intervene between agents - disputes should instead be addressed to Trading Standards or agents' professional bodies. If there is a breach of the Code of Conduct, Mr Hamer will then write to the offending agent asking for the activity to cease.

End

Notes to editors

Enquiries figures for this and the previous four quarters

Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009
Total 2882 3011 3157 3204 3430
Sales 1525 1279 1002 1076 966
Lettings 1006 1258 1489 1446 1679
Other 78 0 153 147 107
General 277 323 361 385 458
Insufficient Information - 151 152 150 220

Cases opened in the previous four quarters

Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009
Total 250 249 192 221 249
Sales 179 162 102 104 122
Lettings 71 87 90 117 127

The Property Ombudsman scheme (www.tpos.co.uk) offers a free, independent, and impartial service to members of the public who are dissatisfied with the service provided by an estate agent who is a member of the scheme during the buying, selling, or letting of a residential property. The Ombudsman, Christopher Hamer, can recommend member agents pay compensation of up to £25,000 in any one case.

Any decision made by the Ombudsman is binding on member agents but not on complainants, who are free to reject the Ombudsman's decision and pursue the matter in the courts if they wish.

OEA was founded in 1990 as the Ombudsman for Corporate Estate Agents, so it is now in its 20th year of operation. In 1998, it broadened its scope to make it available to all residential estate agents. From June 2006, the OEA extended its services to Lettings and Property Management agents. Recent expansion has also seen its redress scheme extended to some UK commercial property transactions and foreign property purchases in the UK.

With effect from 1 October 2008, all UK estate agents engaged in residential property sales are required under the Consumers, Estate Agents and Redress Act (CEARA) to register with an Estate Agents Redress Scheme that has been approved by the Office of Fair Trading (OFT) and which investigates complaints against estate agents. The OEA was the first scheme approved by the OFT and became TPOS on May 1, 2009.

For more information, contact Maurice Hardy, PR for The Property Ombudsman scheme, on 01264 771661 / 07831 272220

16 September 2009
Ombudsman scheme expels estate agent

An estate agency has been expelled from The Property Ombudsman scheme, still owing a £2,000 award made against it.

But the company passed itself off as a TPO member when the organisation checked on it with a mystery shop.

'I would warn potential clients of Foundations, in Beehive Lane, Gants Hill, Ilford, that this firm is not a member of our scheme and has been expelled by us,' said Bill McClintock, chief operating officer of The Property Ombudsman scheme.

'One of the reasons leading to the award against it was that it claimed to be registered with the National Approved Letting Scheme and to be a member of the National Association of Estate Agents but neither claim was true.

'The firm failed to renew its membership for its sales activities earlier this year. Unless this firm can prove membership of another approved scheme it will be trading illegally if it continues to sell houses.

'The complaint leading to the award was in respect of the firm's lettings activities, for which it was a voluntary member of TPO as there is no legal compulsion for lettings agents to have redress in place.

'Even so, firms are required by TPO to honour awards made against them but Foundations has failed to hand over the £2,000 award following a detailed complaint.

'The Property Ombudsman scheme not only ensures consumers have access to compensation when things go wrong but also brings higher standards to the industry as a whole, whether for residential sales or lettings.

'I have given the director, Mr. N. Kudhail, time to renew membership in order that we can pursue the non-payment of the award. The expulsion should demonstrate to estate agents that TPO will enforce its rulings and to consumers that we do not accept poor standards or lax behaviour from member agents when a justifiable complaint has been made.'

Earlier this year, TPO expelled two agents, one in London and the other on Merseyside, after they failed to pay awards against them. Both quickly responded following publicity and have been allowed to re-register for their sales activities but not to become full members until their standards have been monitored for a period of time.

End

Notes to Editors:

Following investigation, the Ombudsman, Christopher Hamer, supported the following complaints against Foundations and made the £2,000 award of compensation:

Substitution of tenant - the property was let to a limited company instead of two women, as had been agreed;