Questions have been raised about the costs of a failed property raffle.
Mark and Sharon Beresford launched a property raffle for their £3m Huf Haus home near Ringwood, on the Hampshire and Dorset borders, in November after it failed to sell due to the Stamp Duty bill, but have now revealed that a cash prize was being awarded instead because not enough tickets were sold.
Press releases as recently as the end of December 2018 celebrated that it would be the last year the couple put up a Christmas tree in their home as they neared the target for their raffle through the WinAMegaHome website.
Raffle tickets were sold at £25 each with a minimum of 250,000 needed.
If the minimum was not raised, the terms and conditions stated that any cash prize would be worth 75% of ticket sales minus costs.
But it transpired last week that just 30,000 tickets were sold raising £750,000, which after spending £640,000 on advertising, marketing, press and legal costs left a £110,000 cash prize.
A draw was made by a random number selector computer at Sterling Lottery Management, which is approved and audited by both the Gambling Commission and PwC.
It selected 100 tickets and local MP Christopher Chope drew the winner from that number.
An independent solicitor was present at the time to oversee the procedure.
The winner has not been identified.
However, the response on social media has been less welcoming, especially from those who purchased tickets in recent weeks when they allege it would have been known how far short the couple were of the required minimum.
Others have also questioned how the couple accrued such high costs.
Angry Twitter users bombarded the feed of the raffle website WinAMegaHome, which has taken down its account.
https://twitter.com/magazinecanteen/status/1083112495873736704
Companies House documents also show that Mark and Sharon Beresford are the only directors of WinAMegaHome, which changed its name from Bears Ford Investments in March 2018.
There is no suggestion of any wrongdoing and other property raffles have also seen the owners set up their own companies to run the competition, which are later dissolved.
A spokesman said the couple were unable to comment on whether they have profited from the raffle and whether the business would be closed, and only released the below statement from Mark Beresford.
It said: “We fully complied with all of the competition rules and relevant laws in order to launch the competition.
“We calculated the prize exactly as described in the terms and conditions, which all entrants had to accept.
“We have spent huge sums of money on advertising that failed to cover its costs.
“The costs incurred were very high and began in 2016 with extensive legal advice and opinions about the interpretation of the rules covering prize draw competitions.
“By the time the competition was launched, costs were already into six figures – to do this properly is neither cheap nor for the faint of heart.
“We will file our accounts in line with statutory requirements.”
Estate agent St Quintin Property Group, which listed the property on Zoopla but only mentioned the raffle, has said it is no longer involved with the listing.
Comments (11)
I’m really not sure where people – including some pretty high-flying journo types – are getting their figures from when writing/commentating on this issue.
Unless my maths (or understanding) is way off-piste, they are all badly, sadly wrong.
Above, the article clearly states “If the minimum was not raised, the terms and conditions stated that any cash prize would be worth 75% of ticket sales minus costs.” Most coverage has got that bit.
SO… the ‘pot’ is £750000 (30000 x £25)
The “prize” is therefore the sum of 75% of £750000 – £562500 – LESS stated “costs”, which, in order to result in a prize of £110070, must have been £452430… and not the £640000 that everyone is getting all shouty about. Now I’m not saying that four hundred and fifty-odd large is a reasonable figure to claim to be “promotion costs” – but it’s almost 30% less than what it’s being portrayed as.
What’s more to the point here is that, regardless of outcome, the property owners were going to make something out of failure – in this instance the “something” is a rather tasty £187,500. That is the ‘missing’ 25% from the equation – the 25% of the £750k ‘pot’ that was never going to be given as a prize.
And that’s before anyone puts a fine tooth comb on the accounts…
Oh – and nothing’s been said about the fact that the rules stated that the “competition” could have been extended by 60 days, but wasn’t.
You would have thought that the £450k+ “promotion costs” would stretch to allow a final throw of the ‘marketing’ dice in order to juice up the prize pot.
But apparently not.
From https://www.winamegahome.co.uk/terms-and-conditions
2. PRIZE. The freehold of Avon Place, Windmill Lane, Avon Castle, Ringwood BH24 2DQ as registered at the Land Registry under Title Numbers DT235054, DT316027 and DT256423 (the PROPERTY) but free of all mortgages and financial charges on completion of the transfer to the WINNER. Plus a contribution to the WINNER’S legal fees (limited to £1500 incl. VAT) and payment of any stamp duty land tax arising on the completion of the transfer to the WINNER. Any fees or taxes payable by non UK citizens or residents will remain the sole responsibility of the WINNER. However, in the event of less than the minimum number of ENTRIES 170,000 being sold by the CLOSING DATE, the PRIZE shall be a cash prize equivalent to 75% of the amount received for ENTRIES into the COMPETITION net of promotion costs.
so the costs are deducted from the £750K before it is multipled by 75%. This still leaves a profit in the company of £36690.
I think it is going to be hard to find out how much was actually spent on promoting the competition as the accounts will not need to detail who money was paid to, just that it was paid. The money could easily have been paid to another company (e.g. Beresford Consulting Services Limited, directors Amelia & Sharon Beresford, registered address Avon Place, 12 Windmill Lane, Ringwood, Hampshire, BH24 2DQ). Also, 2 of the companies the Beresfords are directors of are late filing their accounts (one by more than a year).
qweasdzxc
Your interpretation could be correct. As could mine. As could a number of others, no doubt.
It will be interesting to see whether we ever find out, considering your other findings.
These types of vendors are always penny wise and pound foolish.
And who audits the ‘expenses’. £640,000 on advertising, marketing and legal costs? Yeah, right.
I worry for the poor fools who enter these kind of things…
It’s a pity that the authorities apparently aren’t…
As it seems every couple of weeks we are hearing about another property raffle…..has anyone actually ever won a house?
Am I being simple here? Over £650,000 to try and flog a £3m house?
why didn’t they just use an estate agent that would cost them about £30,000 and sell at a reduced/realistic price?
ive only had one coffee so far this morning, so my brain isn’t at 100% so pls don’t bash me if I’ve missed something 😉
It’s been on and off the market since 2014, with several different agencies.
£25 x 250,000 = £6,250,000 or
cash prize would be worth 75% of ticket sales minus costs.
These are your answers.
Peter
Whilst the above article states that a minimum of 250,000 ticket sales were required, in other sources the figure has been stated to be roughly half of that – which would have raised roughly the £3m price tag on the house.
A FIGURE WHICH it hasn’t sold for in over four years.
Ambition outstripping possibility on both fronts, it seems…