Estate agent fined £30,000 after failing to tell buyers about Grenfell Tower type cladding

A prominent firm of local estate agents has been fined £30,000 after failing to tell buyers “critical information” about the property’s Grenfell Tower style cladding until after the sale.

Haslams, in Reading, Berkshire, did not tell the purchasers of a flat that the building was covered in high-flammable cladding.

The new owners found out 30 minutes after collecting the keys.

The firm was fined by Reading magistrates after a Trading Standards investigation.

This revealed that Haslams accepted an offer on the flat in Kings Road, close to the centre of Reading, in October 2017. Haslams had been instructed to market the flat by Savills on behalf of the owner.

The following month, an inspection of the building found that the cladding contained aluminium composite material.

The material is similar to that which had been used on Grenfell Tower where 72 people died in June 2017.

Haslams was sent the results of the inspection of the Kings Road building on the same day (November 3, 2017) as the inspection, and before exchange of contracts.

However, the lettings team, which has let several flats in the building and which received the information, did not share the information with the sales team.

The inspection led to the fire service recommending that the basement car park be closed due to fears of a vehicle fire spreading to the flats. Residents however remained in their homes.

When news of the Kings Road cladding was made public on November 16, the sales team tried to get instructions from Savills on what to do.

However, the sale completed the following day. The buyers said they would have pulled out of the purchase had they known.

Last night, buyer Jo Sparks told the BBC: “Even if we had found out between exchange and completion, we would still have pulled out.”

The buyers complained to Reading Borough Council’s Trading Standards Team.

Haslams pleaded guilty and at the sentencing hearing the firm cited previous good character and said that the buyers had received some compensation from the firm.

Trading Standards said that the only way that the buyers could have known about the cladding was from Haslams or the seller. It was not, said the council, an issue highlighted by the usual conveyancing searches.

The court was told that Haslams had co-operated with the investigation and that a government scheme was now in place to manage the costs of replacing the cladding.

Cllr Ellie Embersom, of Reading Council, said: “This was an important prosecution which involved a business failing to pass on critical information to a consumer which has understandably caused them a high level of stress and anxiety.

“The council’s Trading Standards team has welcomed Haslams’ response to the investigation and the improvements it has made to prevent it happening again.”

In a statement, the firm told EYE: “Haslams is probably the most trusted estate agency in the area having served the people of Reading for over 180 years.

“Every day our staff receive thousands of calls and emails from our customers looking for our help or assistance.

“Unfortunately, this incident occurred because a communication received was not passed between departments in a timely manner.

“We pleaded guilty due to strict liability and fully acknowledge there was a breakdown in internal communication. However we must stress that there was never any intent to delay informing the buyer or mislead them in any way.

“As soon as the problem came to light, Steve Woodford (MD of Haslams) proactively contacted the buyer and offered a series of measures including subsidising the rent and charging no fees for letting and managing their property, which was accepted.

“A comprehensive review of the matter was conducted immediately and it was concluded to be a failing of the system rather than any one person.

“Consequently, new processes and procedures have been implemented to ensure that such an incident never happens again.”

Altogether, Haslams was fined £30,000 and ordered to pay costs of £2,646 plus a victim surcharge of £170.

Reading Council reported the case on its website:

http://news.reading.gov.uk/reading-estate-agent-fined-30000/

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8 Comments

  1. Woodentop

    Inexperienced agents staff need to learn to walk away from properties that cannot be sold and do a risk assessment before they list. Far too much enfaces is getting the property on the market. Just as a matter of interest where was the purchasers surveyor in all of this?

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    1. Realitycheck97

      A mortgage valuer would almost certainly flagged. My money says it was a cash purchase with no survey or professional advice. 

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  2. WiltsAgent

    I imagine it will be a long time before Haslams accept another instruction from Savills. I wonder why Savills wouldn’t market it themselves.

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    1. Retiredandrelaxed

      Possibly a property that did not fit Savills market profile, ie too down market. The instruction may have come from Savill’s asset management operation.

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  3. Realitycheck97

    Under CPRs, I assume the letting agent side of the business is telling all prospective tenants of the flats that it has ACM cladding?

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    1. aSalesAgent

      That answer to that question appears to be ‘no’ Realitycheck97. Reading Council reports that the flat is in Hanover House, Kings Road, which looks to have a postcode of RG1 4NN.
       
      Haslans is currently marketing a flat which is available from 10th Jan 2020 – I see no mention that the block is covered in flammable cladding. Maybe it was removed in the 2 years since the sale completed?
       
      https://www.rightmove.co.uk/property-to-rent/property-86342039.html

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  4. Estate_Agent_Memes

    It looks like if a cash buyer says “I’m not bothering with a survey” is now a BAD thing for the selling agent!!

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    1. mmmm

      If the letting side hadn’t been made aware, then there wouldn’t have been a case to answer.

      does seem odd that trading standards say only way buyer could have known about the cladding was from selling agent or seller… as others have said, what about buyer survey?

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