Estate agency Purplebricks has revealed that thousands of landlords have been caught up in its IT glitch that saw the tech fail to communicate the prescribed information in relation to tenancy deposit protection in time to tenants.
Between 800 and 3,700 landlords are estimated to be involved after Purplebricks this morning revealed that its exposure to the problem could cost the company between £2 million and £9 million.
These are the potential costs of reimbursing tenants three times their tenancy deposits for not serving them the prescribed information in time.
The law requires that landlords or their letting agents must tell tenants ten key pieces of information about both them and the deposit within 30 days of receiving the deposit.
Purplebricks and its landlords are exposed because, should the tenants wish to, they can apply to a county court and be paid three times their original deposit as a ‘fine’.
Landlords also face restrictions on how and when they can evict a tenant if the tenancy deposit protection rules have not been followed.
Purplebricks has released a statement this morning revealing that it is talking to tenants – it has two weeks to sort the problem out – to ‘correct’ the original communications process.
“The company believes that it is prudent to provide for any potential future claims which could arise under the Housing Act in relation to this regulatory process issue,” the statement says.
“Early provisional estimates by the Company suggest a potential financial risk in the range of £2m-9m.
“Purplebricks is now in the process of finalising the level of provision required and associated disclosures and has therefore taken the decision to delay its results for the half year ended 31 October 2021 which were due to be published on 14 December 2021.”