Expelled agent set to sue Ombudsman for defamation

The London agent expelled from the Property Ombudsman scheme after refusing to pay a fine is threatening to sue for defamation and seek substantial damages.

Global Realty is objecting to a press release sent out by the scheme about its expulsion. It claims the press release is inaccurate and damaging.

The firm, which handles both sales and lettings, has maintained that it did nothing wrong, and was only obeying its client’s instructions in returning a tenancy deposit to the landlord.

The firm says that the matter of the tenancy deposit, which the landlord had protected, was purely between the tenant and the landlord.

But Nathan Galer, an investor in Global Realty which is run by his wife Ricky, has told the Ombudsman that its press release was factually incorrect in every detail. “We read it with dismay and shock,” the firm says in a letter to the Ombudsman. The letter claims the Ombudsman cannot have read all the evidence properly.

The agent claims that the release has damaged its good name and reputation and may affect its future business. It is calling on the Ombudsman to take back its claims, and release what it says is the truth.

The Galers say they refute every one of the claims made in the press release circulated by the Ombudsman scheme.

For example, they take issue with the Ombudsman having expelled Global Realty, as they maintain they resigned from the scheme long before, after finding that, legally, they did not have to join it.

They say they had been falsely led to believe that they had to join on the lettings side of the business, but received no paperwork, despite many requests. They had therefore asked for their money back and resigned.

In particular, they say the Ombudsman’s central accusation, that the firm paid to the landlord the deposit without ensuring it was adequately protected under tenancy deposit protection laws, is “completely untrue”.

Mrs Galer says it was only after receiving confirmation in writing of the landlord’s scheme number that the deposit was transferred to the landlord. She says that a copy of the email sent by the landlord was given to the Ombudsman. Furthermore, the agents say that they had handed the deposit to the landlord after being told there was no dispute over it – the tenants had agreed to forfeit it as they had left the tenancy early, owing rent.

The company therefore says the Ombudsman fundamentally got the matter of the deposit itself wrong.

The Galers claim there was only one deposit, equivalent to six weeks’ rent, and they do not understand how the Ombudsman talked of a second deposit.

According to the press release: “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.”

Global Realty’s reply to the Ombudsman is: “You got it completely wrong.”

Their letter points out that the deposit was for six weeks’ rent and that the £900 remaining was unpaid rent covering a period when the tenant was still in residence and which had nothing to do with the rest of the agreement payment.

Global Realty also takes issue with a sentence in the Ombudsman’s press release that the firm had failed to respond to a final warning to pay the fine.

Mrs Galer says this is untrue, that a response was made, and a solicitor employed to make it.

Property Ombudsman Christopher Hamer has said he will not reverse his decision and that if any legal action is taken he will act accordingly.

The Galers said yesterday that Bill McClintock, who runs the business side of the scheme, has acknowledged their letter, saying he will put it in the hands of insurers.