Police are investigating allegations that people who used a quick-sale firm to sell their homes lost thousands of pounds and were only given a fraction of the money they were due.
There are at least four alleged victims, but police believe there could be more in what they believe has been a large-scale operation.
The matter raises question marks as to whether quick-sale firms are ‘estate agents’ in the eyes of the law, and if so, how many are trading legally.
One man who used speedyproperty.co.uk to sell his home says he received under half of what the property was sold for.
Yesterday the website of the firm was down and telephone callers were told that the number was no longer in use.
Philip Edwards says he received only £68,000 from speedyproperty from the £165,000 sale of his home in Hawarden, Flintshire.
He claims the remaining £96,000 was paid to two other companies.
The BBC says it understands that the founder of speedyproperty is a director and shareholder of these two companies.
Edwards said he had no knowledge of these companies, and it was only on completion that he became aware of the payments.
He said he was told the money would be invested for his future, but he has not been able to contact either of the companies.
Edwards contacted speedyproperty, which is based in the midlands, after seeing a newspaper advert.
After the sale, he used £64,000 – almost all the money he received – to pay off debt he owed to his first wife.
He stayed on in the property, a three-bedroom semi which had originally belonged to his parents, as tenant. It had been the family home for four decades.
However, while in hospital with cancer, Edwards, 69, fell into arrears and was evicted last year.
He now lives with his second wife in sheltered accommodation.
Edwards told the BBC: “It’s as if everything that my parents worked for and what I’ve worked for, and at the end of the day there’s nothing.”
West Midlands Police are investigating and say they are looking into other complaints from people who sold houses through speedyproperty.
The BBC reports that it is believed a number of different named companies with the same directors and shareholders received large sums of money from the house sales.
Solicitor Nigel Cole said he is acting for three clients and is preparing to issue a claim for negligence against a law firm in the midlands which acted for them in speedyproperty sales.
He said his clients were vulnerable people who had been taken advantage of.
Speedyproperty.co.uk is not listed as a member of the National Association of Property Buyers, which was set up to improve the industry.
It requires its members to belong to The Property Ombudsman and abide by its Code of Practice for Residential Property Buying Companies that came into force last October.
In 2013, the then Office of Fair Trading looked into quick-sale companies.
As a result of its investigation it launched a probe into three unnamed providers which raised “serious concerns” and wrote to almost 120 advising them to check their business practices and contractual terms.
The OFT found that very few belonged to an estate agents’ redress scheme.
But are quick-sale firms ‘estate agents’ in the eyes of the law? It appears to be a grey area.
Jonathan Rolande, who set up the National Association of Property Buyers, said last night: “If buying for your own company, no.
“You are governed only by the TPOS Code for Property Buyers if you are a member.
“If you’re not a member you can do whatever you like as if you were a member of the public, unless it is illegal.
“If you are in the middle and take the enquiry, then sell to another person or quick-buy company etc, then you are an agent and governed by that law.
“Sellers answering ads in papers, etc, are on their own unless the buyer is a member of a redress scheme.”
A spokesperson for NAEA Propertymark said: “For the vast majority of the time, the quick-sale model is one through which property developers can invest in property quickly, for a price that’s under market value, allowing the seller to access the equity in their property quickly.
“Very occasionally, if a third party is using the model to act on behalf of an acquirer or the seller, they could be interpreted as an estate agent. However, this is unusual as, unlike estate agents, the general understanding is that sellers will not get full market value for their properties through this model.”
A spokesperson for TPO said a property buying company buying a property for themselves would not be an agent.
TPO is looking into how many of its members are, however, quick-sale companies.
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