Purplebricks only told auditors that it was facing a multi-million pound liability for bungled paperwork on the same day that it was questioned about the issue by The Telegraph, it can be revealed.
That’s not the mark of a well run finance department now, is it?
This also sounds like truly appalling law:
Shares in the Aim-listed company fell by more than a fifth on Monday after it released a statement to the stock market admitting that tenants were not given legally required paperwork explaining that their deposits are put into a national protection scheme.
These important lettings documents must normally be provided within 30 days of a deposit being paid. Failure to do so allows tenants to claim back up to three times the value of the money, from either the landlord or the estate agent.
Not nicking the money, not failing to put them in the scheme, but just not giving them the docs leads to a triple compo claim?
Who in buggery makes these laws?
Ah, yes, that’s right, the PPE graduates who came up through the student union.
I thought I’d covered most of this when I wrote about Purplebricks elsewhere yesterday. But apparently not, it’s getting worse.
Well done for underlining something in that piece, Tim. One word. Confidence. Underlying everything in finance & commerce is that one word, Amazing how many people don’t get that. Especially the Sage of Ely with almost every one of his pronouncements. It doesn’t matter how good you think whatever you’re offering is, whether you sell it depends on the confidence of the buyers that you’ll deliver what you’re promising. So primarily, what you’re selling is that confidence.
It’s the answer to that nonsense about what defines a currency. Whether or not a government insists on it in payments of its taxes is irrelevant. It’s whether people have the confidence to accept it in return for goods & services. If they won’t, then the government can’t pay for the goods & services it requires in its own money. It can’t pay its employees’ wages with e taxes it’s raised. It’s not accepted as a currency.
That’s why I never went into the landlording game. It’s all too much hassle now.
In the old days one would burst through the door and if the tenant couldn’t pay one twirled the moustache and demanded it “in kind”.
See also delivering pizzas.
Yea gods, I put that on the covering letter than accompanies the tenacy document, along with the utilities suppliers and meter readings.
“This also sounds like truly appalling law:”
You ever rented property? Here, you never get your deposit back & that’s that. You just factor it in to the overall rent over the period. UK-side, with private landlords it was much the same. Agents it was a protracted period of hustling them. Third party holding is a great idea but you need to incentivise the mechanics of it. At the start of the tenancy the letting side holds all the cards. They’ve got all your money so you couldn’t unwind the deal if you wanted to because you need somewhere to live & can’t afford to rent somewhere else. And letters have a nasty habit of not delivering what they promised. If they’re not coming through with the required paperwork, where’s your money? Seems like a good incentive. It is not their money. It is your money they’re holding as a bond of trust. They have a duty of care. If they can’t get it right, it’s a serious breach of trust on their part.
The law exists to penalize landlords who “forget” and keep the deposit in their back pocket. The tenant should be given the reference issued by the deposit company which is their guarantee that an independent party will, if necessary, arbitrate how much if any of the deposit should be returned at the end of tenancy. Without the reference the tenant is at the mercy of the landlord who may just decide to keep the deposit.
“That’s not the mark of a well run finance department.”
I was once discussing a great architectural cock-up. “Don’t architects use check-lists?” I asked. “What a good idea” she said, and took out her diary and wrote “checklists”.
Really, some people!
Turns out some jobs require technical expertise, experience and ability and promoting MBA’s to meet diversity targets and maintain the youthful culture of you’re organisation isn’t a great idea
“The law exists to penalize landlords who “forget” and keep the deposit in their back pocket.”
I don’t see the need to penalise landlords (full disclosure, I’m a landlord using a reputable – ho ho – agency – with 3rd party deposit protection) wihtin 30 days. This is end of tenancy stuff: if landlord doesn’t provide the 3rd party – or the cash – on the nod, automatic triple penalty.
I don’t see the need to do it beforehand.
@ The Pedant-General
The problem is that unless it’s put into a deposit scheme (or similar) up-front, then it may be difficult to get it out leter. I.e. if the landlord just decides to keep it and “find the money” later when the tenant leaves, then the tenant will face the uphill work of making sure the landlord does what he’s required to do. In extreme, the tenant could be due 3x the deposit back – but will have to take the landlord to court to get it, taking months (or perhaps years these days).
The vast majority of us landlords did things properly – but a small minority (I assume the same ones that don’t care about repairs, or gas safety, or electrical safety, or …) didn’t (and probably still don’t) do it right. Hence the rules on deposit protection.
And the 3x penalty (plus other penalties like not being able to serve a S21 notice) is there as an incentive to do it right. For those of us that always do it right, it’s not a problem at all.