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.

Statement

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.”

Read more about tenancy deposit protectin schemes.

2 COMMENTS

  1. How can this be right that LL’s are fined 3x deposit for supplying late a bureaucratic and pointless document, telling the tenant what they already know, or is in – or should be in – the contract?

    As all the information is held by the deposit protection agency, why don’t they just issue the PI automatically to the tenant once they have received the deposit? LL’s really don’t need this waste of time on top of all the other myriad of compliance matters.

  2. A perfect reason why NOT to use LA.

    They are invariably useless and leave LL in big doo doo.

    I have NEVER forgotten to serve PI.
    It really is very easy to facilitate the correct paperwork.

    NEVER have I NOT known which paperwork should be supplied.

    I know far more than LA.

    These idiot LL should NOT have relied on PB.

    They now face financial destruction all because of a bit of stupid paper that incompetent PB failed to issue.
    They could well find evicted tenants demanding access to their former letting property.

    The new tenants will be squatting as they won’t have a legal contract as the previous evicted tenants were illegally evicted through failure to supply PI.

    Savvy illegally evicted tenants will be taking these dopey LL to the cleaners.

    The chances of LL receiving full financial recompense is precisely zero.

    A lot of tenants will find themselves being removed by Police with the previously illegally evicted tenants moving back in.
    Of course not paying rent and having to be evicted all over again once the LL returns the deposit and pays 3x the deposit.
    Gonna be a nightmare for many LL and PB.

    Avoid LA at all costs.
    Self-manage……far safer!

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