Purplebricks delays results after costly deposit error
Purplebricks has delayed its half-year accounts as it steadies itself for a £30m bill for failing to follow tenancy laws.
The online-only estate agent has failed to serve tenants with legally required documents, which explain that their deposits have been placed in a national protection scheme.
Failure to do this within 30 days means that tenants can reclaim up to three times the value of the deposit.
Purplebricks has delayed its half-year accounts as it steadies itself for a £30m bill for failing to follow tenancy laws.
The online-only estate agent has failed to serve tenants with legally required documents, which explain that their deposits have been placed in a national protection scheme.
Failure to do this within 30 days means that tenants can reclaim up to three times the value of the deposit.
Purblebricks said in a regulatory update today (13 December) that it had been made aware of “a process issue” during “an internal review”. “Further enquiries into this matter are currently being conducted and the communications process is now being corrected,” it said.
However, it added that it would be “prudent to provide for any potential future claims which could arise”, and as a result it would delay its half-year results, which were due to be published on 14 December.
“Early provisional estimates by the company suggest a potential financial risk in the range of £2-9m,” the statement added, saying it is “in the process of finalising the level of provision required”.
As there is a six-year limitation period for tenants to raise the issue, even £9m seems a conservative estimate of how much Purplebricks could owe. Legal experts have said £30m could be a closer figure.
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