Local property experts of online firms rush to join redress schemes to obey law

Individual Local Property Experts who are self-employed with the likes of Purplebricks and others are being urgently signed up separately to redress schemes, such as the Property Ombudsman Scheme, in order to avoid breaking the law.

It is understood that these individuals and businesses are now being fast-tracked into membership of authorised redress schemes.

We understand that these self-employed individuals have not until now been recognised as separate entities, but have instead been treated as part of the organisation they work for on a commission-only basis.

It appears this has potential breach has now been spotted, highlighting the implication that some local representatives of online and hybrid agents as well as self-employed associates of high street agents, as businesses in their own right, should be signed up to a redress scheme.

It seems that the difficulty applies to any organisation that uses self-employed agents.

The implications could go far beyond membership of redress schemes, extending to tax, money laundering and data protection obligations.

Last night, Purplebricks told EYE: “Purplebricks are members of the Ombudsman scheme and have always sought to abide by their regulations and underlying principles.

“We have always been available as redress for consumers should the need arise.

“In order to further promote professional standards in the industry our Local Property Experts have or are in the process of completing registration with the Ombudsman.”

Yesterday evening, a TPO spokesperson also told us:“Purplebricks are TPO members and their local Property Experts have applied for TPO membership at the request of Purplebricks head office. This news will enable TPO to protect consumers should a dispute arise.

“Our membership department is in the process of registering members and any firm in a similar position is very welcome to talk to us to ensure they are compliant with the law.”

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38 Comments

  1. Frown Please

    “In order to further promote professional standards in the industry our Local Property Experts have or are in the process of completing registration with the Ombudsman.”

     

    Not

     

    “In order to be law abiding citizens…”

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  2. nextchapter

    Tell me if I’m wrong, but if they are all self employed, they all have to individually become members of the property ombudsman, then surely they must individually have their own Rightmove memberships.

    This whole scenario really needs to be followed up and looked into and it will be really testing for TPO and Rightmove etc, as it how seriously they actually take this stuff.

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    1. Chri Wood

      I can assure you, it is.

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    2. AgencyInsider

      Sorry nextchapter, I don’t think that is the case. The vendor contracts with PB, not with the LPE.

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      1. Chri Wood

        The legal status of LPE’s is going to be a source of great interest with a variety of agencies over the coming period

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    3. smile please

      I assume if they are seeing as a seperate company contracting to PB and have joined a Redress scheme they also have their own PI cover?

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  3. PeeBee

    A week ago, I bought a coffee maker for the office.  A tenner – bargain.  As well as a dishing out a tasty cuppa, makes for a wonderful smell in the office, I reckoned.

    This morning I won’t need to switch it on, I reckon.

    Neither will any Estate Agency up and down the country.

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    1. MagneticBullet35

      Genuine question:

       

      What are most estate agents attitude to Purplebricks?

      1) ignore it, it might get somewhere but won’t change the industry

      2) peeved at the unfair competition

      3) scared they’ll take all the business

      4) wait and see / maybe come up with something to compete

      ?

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      1. PeeBee

        Genuine question:

        What’s yours?

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        1. MagneticBullet35

          2 and 1 with a bit of 3

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          1. PeeBee

            Surely there’s a 5); a 6) and depending on your point of view, a 7), and an 8) ?

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  4. Robert May

    “Self employed agents”? don’t HMRC regulations prohibit self employment where the income is received from a single employer.

    If these reps and “businesses” now require individual redress scheme membership how does that effect things like ICO  and VAT registration? Surely  if the individuals are now claimed as separate businesses the  contacts clients have signed are  likely uncertain too and invoices may have been charged by firms not registered for VAT.

    Perhaps someone ought to clarify  the  exact status and compliance requirement of every individual who was outwardly portrayed as an employee.

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    1. Eamonn

      Heads gone again.

      check the HMRC guidance notes

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      1. Robert May

        Don’t they work for a single employer who sets out the fee structure and presumably prohibits them from working as a listing rep for other call centre agents or acting as a passive intermediary listing their own register?

        (your attempts to insult me don’t so why bother? are go going to repeat and repeat yourself til some laughs like a un-funny uncle?)

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  5. GlennAckroyd

    This is shocking and basic.

    Since we started, all of our network, which are separate entities are required before they start to;

    – Join The Property Ombudsman Scheme

    – Register for VAT

    – Register for Corporation Tax

    – Take out the required level of Professional Indemnity (£250k cover) , Employers (£10m cover) and Public liability (£1m cover) insurance

    – Register with HMRC (it’s an offence to trade as an estate agent until you have – http://www.gov.uk/registration-guide-for-estate-agency-businesses) and obtain and Anti-Money Laundering Certficiate

    – Register with the Information Commissions Office for Data Protection – https://ico.org.uk/registration/new

    – Obtain car insurance cover for estate agency usage

    Not doing a number of these things means that you are trading illegally – Illegal contracts are unenforceable.

    That gives lawyers for the thousands of people who have to ‘pay later’ when they’ve not sold lots of ammunition.

    If one of these client’s contacted Leigh Day who like to litigate class action, it would be interesting.

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    1. Farmer

      Bit of an oxymoron I know but  what about ‘self employed staff’?

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      1. smile please

        Next thing you see they will be on zero hour contracts, and commission only!

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    2. Robert May

      Thinking about this over breakfast,  when purplebricks floated doesn’t this revelation make that float uncertain too?  A legitimately trading company with 150+ ‘experts’  (their term not mine) on board  and fully compliant with redress etc is a different entity to a cooperative/ franchise? (TheJeffries story about reinventing franchising had me curious earlier in the week) made up of 150+ affiliated businesses. I didn’t look at the float literature, perhaps someone who did  can outline what was floated and what people have invested in, after this and the Jeffries story it is now far from clear

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  6. Oliver Wharmby

    I wonder if they have PI insurance?

    In order to join the TPO you require PI as a pre-requisite.

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    1. Eamonn

      Sorry Oliver,   They won’t be coming to you.  PB have told their LPE to use their PI

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  7. Ted58

    Couldnt agree more with Robert May, its clearly prohibited when income is derived from one employer.

    Just seems PB make their own rules with no real consequences, makes you wonder who has invested……

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    1. Eric Walker

      There is nothing wrong with being self employed. It was people who were sole directors of a consultancy with only one clients who avoided tax by paying them self dividends.

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      1. Neilw

        I think you will find this is not the case…..if self employed for one employer you are treated as an employee and can get caught with employer being responsible for holiday, sick pay and paye

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        1. Beano

          As in life, there are always exceptions, this is probably not the issue here as they will have issued legally compliant ‘sub franchise’ type of self employed agreements no doubt.

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          1. Chri Wood

            If they’ve omitted the very basics of registering them with a recognised redress scheme, I wouldn’t bet the house on it

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  8. theunsaid63

    So if they,as individuals need tpo membership then it then follows that they need to pay hmrc for amlr and ico for data protection and then personal indemnity and public liability insurance too.

    surely?

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  9. PeeBee

    I have been commissioned to write the script for a TV commercial for a well known company.

    Keep it simple, they said.

    What do you lot reckon to this:

    ‘Michael – you push up hard on the roof and I’ll shore up these crumbling walls, okay?

    Michael?

    Are you there, Michael?

    MIIICCCHHHAAAEEELLLLLLL…

    No need to give positive feedback – the number of ‘Dislikes’ will tell me everything I need to know ;o)

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  10. Chri Wood

    I’m not sure of the employment status is of YOPA, eMoovs’ and similar ‘local experts’ (oxymoron) but, I suspect tpomb is going to be working flat out for the next few days.

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  11. Neilw

    Just to add fuel to the fire if they are operating a letting service in Scotland it is a legal requirement to register as an Agent in each Local Authority Area they operate. I cannot find PB or their LPE on any public Landlord register in Scotland???

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  12. Penguin

    PB have cut corners!?

    I’m astonished…..

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  13. PeeBee

    OPEN LETTER TO MILES SHIPSIDE, COMMERCIAL DIRECTOR, RIGHTMOVE plc.

    Dear Sir

    I write on behalf of many Estate Agents up and down the country, however if you wish I am sure that via Twitter, PropertyIndustryEye, and various other connections I can, should you prefer, arrange the Principles, Directors and Owners of many, many companies to write to you separately.

    You will no doubt be aware of issues that many of us in the industry have been bringing to Rightmove’s attention and requesting that action be taken, in accordance with Rightmove’s Terms and Conditions of Membership (as softened… sorry, amended… following our requests for action), namely #portaljuggling, re-listing/re-loading, false claims over ownership of the sale of a property – the list goes on.

    This, for some reason, is ongoing almost a year after first notification and still it is happening day in:day out – but it is not the issue we wish to pursue here today.

    The reason for this Open Letter – which seems to be the accepted new way to draw attention to issues of concern within our industry – is in respect of whether Rightmove agree that companies who employ the services of ‘Local’ Agents on a self-employed/franchised/ad-hoc basis in order to barely comply with minimum requirements of your Terms will be required to register each of these people as a profit centre/’branch’, and therefore be required to pay a separate Membership Fee for each profit centre (and discipline) advertising on your website.

    My company has several branches, and offers both sales and lettings.  We are charged for each branch.

    My current understanding is that ‘national’ companies which have been operating from a central Call-Centre/HQ/nest or whatever they deem to term it as pay per ‘area’, per ‘X’No. properties, or similar.

    There are some 3500 ‘Activity Centres’ in the UK (credit: Robert May).  Many of these companies claim to cover a whole Region (sometimes encompassing several counties) by one ‘Local Property (insert name-of-the-moment)’ – and it has been evidenced that in some instances the travel time alone from one end of their ‘patch’ to the other would be in excess of three hours.

    I have provided PropertyIndustryEye with evidence that one ‘National’ company is offering the services of the same ‘Local Whatever-you-want’ from North Northumberland to mid-Yorkshire – a patch extending to over 150 miles.

    So, Mr Shipside – the floor is yours.  Please confirm:

    Do ‘National’, Centralised Office, ‘Online’, ‘Hybrid Online’ or otherwise multi-area Estate/Letting Agents currently pay per ‘Local’ presence?

    If not – will they be required to do so in future?

    If they will be required to do so in future, what criteria will they need to satisfy?

    and

    What criteria will Rightmove be setting as to their scope of operation?

    I sincerely hope that you are prepared to accept this on behalf of many wanting these – and more, answers, as the above list is far from exhaustive.

    In fact – I am simply scratching at the surface to test the lie of the land for communication.

    I look forward to a response, Mr Shipside.

    Yours sincerely

    PeeBee.

    And a few others.

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  14. Chri Wood

    With apologies to Ros and the team at PIE who were asked to remove my previous post. Here is an edited version that does not make any unfounded or unproven accusations or allegations.
    So PurpleBricks, a well-funded ‘disruptor’ that has been trading since it’s inception with a large number of its independent contractors which operate under its brand name and subsequently went to the city for an IPO is now racing to add all of the said contractors onto an approved redress scheme. The NTSEAT guidance notes on this are linked to below and readers can draw their own conclusions*.
    To be fair, failing to adhere to a fundamental requirement of the 1979 Estate Agents Act (as amended) when setting up a multi-million pound business is a simple oversight that could happen to anyone after all.
    Similarly, it is most likely that this is an isolated oversight and all of the associated companies are, of course, already correctly registered with the ICO, FCA** VAT and PAYE etc. and have individual PI and PL cover etc. etc. Bound to have, without a shadow of a doubt. I’m also quite sure that the gentleman working at the ICO made a similar mistake when he failed to find the first couple of names I queried with him on this matter.
    *GUIDANCE ON PROPERTY SALES Compliance with the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008 September 2015 – Link – http://bit.ly/1NP6Ap1
    **Offering credit to consumers: the law – GOV.UK http://bit.ly/25BuERa

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    1. Frown Please

      Were there any unfounded accusations?

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  15. Robert May

    ico.org.uk/esdwebpages/search comes up with “There are no entries that match your search criteria”  probably a glitch on the system

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  16. Woodentop

    Employed or self employed all depends on what is written in their contracts. A self employed can be considered an employee with the correct wording. However as their is so much legislation these days and trying to get around the self employed not being an employee can easily fall foul of issues …. such as requirement for redress scheme and is the contract actually legal and indemnifying the company. Looks like someone got egg on their face at PB. Basically any company that employ self employed is trying it on to their advantage.

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  17. Farmer

    Lovely to see the 2 or 3 LPE’s on here showing their ‘dislike’.

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  18. Frown Please

    The word ‘disruptor’ should have its meaning changed to ‘a company, which will do whatever it can to deceive. Disrupting peoples working lives sorting out the issues left behind by the ‘disruptor”.

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  19. MagneticBullet35

    Users of the site might be covered by PB’s umbrella membership of the redress scheme if they ever needed to make a claim. It would have to be tested in court when someone tried to make a claim which it hasn’t been so we won’t ever know.

    It hasn’t come out what pushed PB to get all its “local property experts” to register but you have to think someone made a complaint to a regulator. PB would have had the option to argue to point in court which might have ruled they were ok but PB decided instead to register everyone. That usually means it wasn’t worth the cost/bad publicity (or they didn’t rate their chances of winning).

    Just like with Uber self-employed agents are creating a headache for everyone to know who is responsible for what and therefore who needs the insurance and regulation. It’ll get sorted out over time and I don’t have a problem with it if it means customers/users are protected while getting a better price and employees/agents are not shafted.

    Also with the Jefferies story, bear in mind they are broker to Countrywide. It’s hard for them to be positive on both business models.

     

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