An estate agency says it is returning money to buyers after a newspaper revealed it was demanding would-be purchasers paid the firm £2,000 “if they want to be taken seriously” when making an offer.
The outer London agency Brian Cox - which has five offices in Greenford, Northolt, Harrow and Sudbury Hill - allegedly wanted prospective buyers to hand over a £2,000 ‘deposit’.
Brian Cox told buyers to pay the money into a NatWest account in return for which “the property will be removed from the market.”
The website of the agency carries a ‘reputation report’ from ReferenceLine, an ‘OFT Approved Code’ logo (although the Office of Fair Trading was abolished over a year ago) and also carries The Property Ombudsman’s logo.
However, The Guardian quotes outgoing-TPO Christopher Hamer on the Brian Cox tactic:
‘He told us the current code of practice which took effect in August 2014, “stipulates that agents must not take pre-contract deposits. Firstly, it is the vendor who decides what offer to accept and whether the property is taken off the market. Secondly, the agent is paid by the vendor to progress the sale of their property, not by the buyer”.
‘He says that in some cases, known as “sale by tender”, the buyer is asked to pay the agent’s fee, but adds that this is not the same as taking a deposit to progress an offer.’
The newspaper claims there is no information about who this account belongs to, or whether it is a protected client money account. The Guardian also says the documentation seeking the £2,000 from buyers “suggests the deposit won’t be refunded if the buyer changes their mind or has to pull out because, for example, they have lost their job – they would only get their money back if the vendor withdraws from the sale, or the buyer receives an adverse survey/valuation report on the property, or the local authority search throws up problems that can’t be sorted out quickly. The deposit is also refunded once contracts have been exchanged.”
Estate Agent Today contacted Brian Cox agency over the weekend but has not received a response.
However, The Guardian says the agency - which has reportedly been demanding the deposits for about a year - is now reconsidering its tactic in the light of the newspaper’s article.
An agency spokesman is quoted in the article saying: “It’s not a new idea. We saw loads of developers doing it. I’ve told the ombudsman we are stopping the scheme and are in the process of giving everyone their deposits back ... It was an oversight. No one else has complained. It’s not my bank account.”