The industry regulator has issued supplementary guidance for estate agents as to whether legally they need to join a redress scheme.
However, the new advice from the National Trading Standards Estate Agency Team seems to stop short of spelling out whether self-employed agents – typically, Local Property Experts working for online agents – must belong to a redress scheme.
The advice does say that employees of agents do not need individual membership.
But it does not stipulate whether a self-employed person doing estate agency work for another business needs individual membership in order to comply with the law, or whether they would be covered by that other business’s membership.
Instead, it says that a “business, irrespective as to legal status, is itself a ‘person’ and, if engaging in residential estate agency work, would need to be a member of a redress scheme”.
One agent who has been pressing for self-employed local property experts to be treated as businesses in their own right said he interpreted it as meaning that LPEs must by law join a redress scheme.
Chris Wood said: “This clarification by NTSEAT adds weight to the claims that certain major companies and their sub-contractors, by failing to have their sub-contractors registered with an approved redress scheme, have been trading illegally and that the portals have failed to carry out the basic vetting procedures as they are contractually bound to do.
“As each Local Property Expert is an individual business, they must each belong to a redress scheme.
“Failing to do so is illegal and customers of those LPEs/ the head company could well have a claim for a refund of fees plus, potentially, damages.
“As individual businesses, these LPEs must also have separate VAT, HMRC, Money Laundering and ICO registration etc. Failure to do so may also have separate serious consequences.”
In June, EYE reported that self-employed Local Property Experts working for the likes of Purplebricks were being fast-tracked into The Property Ombudsman scheme.
The new guidance does specifically clarify other areas – for example, the need for letting agents who already belong to a redress scheme to register for sales redress if they handle any sales work.
It also makes clear that UK-based agents who only sell properties abroad must join a redress scheme.
HMRC define any person who is not an employee but earn commission from selling goods for other people is self employed and go on to define that person as “a trader” in their own right. Therefore I would say that while a self employed person may work under the umbrella of another company (trader), they clearly need to have a contract to identify responsibilities and liabilities. Without one, they must be registered with all regulatory organisations on an individual basis as a sole trader. There is practically no advantage for PB to have self employed …. except for the get out clauses which many can imagine. This would make their self employed sole traders.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
HMRC ESI has defined PB self-employed as self-employed in law and even PB state their status is. Now how can one organisation like NTSEAT dodge the question?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Given that it’s within a week of Purplebricks distancing themselves from a ‘viewing assistant’ employed by an LPE, this is not even a question. LPEs are separate legal entities to them. Q.E.D.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It would be interesting to audit the HSE risk assessments for the sub contractors, to the sub contractors.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Or basic level of money laundering checking going on by an almost certainly ignorant LPE / viewing assistant or centralised yet completely remote online offer system.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It is very obvious that specific clarity is required from everyone fro. TPO, NTSEAT HMRC Customs and Excise ICO Health and safety and every other regulator involved to provide everyone with a definitive if bespoke ruling.
If these are employed staff minimum wage, working time regulations, holiday pay become a consideration as does corporate responsibility for lone workers etc. If they are bona fide sub-contractors responsible and culpable like any other franchisee the those firms have responsibilities too.
The acid test is who would a vendor litigate against, who are the parties to the contract? answer that and you answer which set of rules are being broken by an apparent pick’n’mix approach to legislation.
From where I’m sat it looks like sharp operators taking advantage of lackadaisical and uncertain regulation.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
A quick check on the TPO website ‘find a member’ section yesterday using the search terms “Purplebricks” in trading name and and “England” in location, listed just 100 registered names. This falls rather short of how many PB LPEs PB claim to have.
The key comment in this article is that PB were mass registering LPEs in June 2016. PB floated in December 2015 and were trading long before that. Any lawyers care to comment on that statement of fact?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I scraped the TPO website and it returned 202 members.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Still over 100 short of the number of LPEs claimed by PB and, the dates they became members is legally crucial. Any LPE trading before being told by PB that registration was (and has always been) a legal requirement, must feel rather exposed and let down by PB.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Personally as a customer I would rather have everyone that operates under the Purplebrick brand (for example) be covered 100% by Purplebrick, with Purplebrick having the same level of liability for their action then normal agent has for their employees.
I think the law needs changing so that if a “reasonable person” considered an agent to be working for another company, that company has full responsibility for their actions. Most tenants for example think that Northwoods is one company, due to the banding, but yet Northwoods can wash their hands if one of their offices runs off with the tenants money.
Customer protection should not be depended on how HMRC defines the tax status of the person doing the work……
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
A fundamental part of being in a redress scheme is that each business must hold PI Insurance. It must be costly to each LPE to take out their own PII each year.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Do these experts have CMP?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Unless NTSEAT and TPO take the correct stance we will never know and that is why they are there? If your or I didn’t, they would pounce from upon high! So come on NTSEAT and TPO you’ve had long enough with PB since 2015.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register