Purplebricks to withhold commission from Local Property Experts after over 450 breaches

Purplebricks to withhold commission from Local Property Experts after over 450 breaches

Purplebricks is witholding commission from Local Property Experts because of breaches of anti-money laundering rules. However, after enquiries by EYE, it appears to have dramatically cut the threatened numbers, saying last night that it will mostly pay out.

Worried LPEs had earlier said over £60,000 worth of commission in total would not be paid, based on emails – seen by EYE –  from co-founder Kenny Bruce.

Altogether, the business itself agrees there are 450 properties listed in the last fortnight in July that were not compliant with the law and with Purplebricks’ own requirements on anti-money laundering.

In one email sent from Kenny Bruce, seen by EYE and headed ‘Anti-money laundering checks’, some LPEs were told that they had “allowed a property/properties to go ‘live’ without the proper identification checks in place. Lists of the LPEs and properties threatened with non-payment have also been seen by us.

The LPEs have been disputing that they did anything wrong with a number furiously threatening to quit, EYE has been told.

Bruce’s email says: “It gives me no pleasure to do this but you will not receive payment for the instruction of any property that went live from Monday 16^th July 2018 and we can see that you allowed a property/properties to go ‘live’ without the proper identification checks in place.

“It gives me no pleasure to do this but you will not receive payment for the instruction of any property listed in these circumstances, as you are in breach of your licence agreement which requires you to comply with the law.”

The email ends: “In future please take the time to ensure that you only allow properties to go ‘live’ when you have the appropriate identification checks in place to avoid this happening again.”

LPEs are self-employed and so are not paid any basic salary, but do receive £150 per listing.

We have been told that LPEs are required by Purplebricks to check LexusNexis for details of property owners – a free service provided by Purplebricks – and to pay £3 for Land Registry details as to property ownership.

They must then make this checking information available to head office before a listing can go live.

The move to withold commission led to uproar among LPEs, with a number threatening to leave.

LPEs  said that the punishment far outweighs any crime, amid claims that they  carried out the checks correctly and that head office has not reviewed the information properly.

Some LPEs are said to have several properties on the ‘black lists’ sent out by Purplebricks head office.

One LPE who will lose commission but insists they correctly supplied the information told EYE: “How can you go out in confidence on a visit if you don’t know whether you will be paid or not for the listing?

“There are 650 of us – all self-employed, and not on any kind of basic.”

Yesterday, a spokesperson for Purplebricks was unapologetic about what it called its robust approach.

He said: “Purplebricks takes compliance extremely seriously and, as you would expect from a leading professional estate agency, we have a compliance team who have put in place comprehensive and robust standards.

“As a result we have a number of internal compliance procedures and administrative measures over and above any legislative obligations, and these all form part of our approach to achieving best practice.

“Our Local Property Experts are fully aware of their responsibilities and, whilst they all work hard to meet our compliance requirements, there will be occasions when our compliance team will need to step in to resolve non-compliant cases. This is true of all agency groups.

“Those matters identified recently by our compliance team represent a very small proportion of our overall property stock. As is usual in such cases the large majority of these become fully compliant within hours of being identified.  We are committed to complete compliance and take a robust approach.”

EYE was told that commission will be paid on properties made compliant, but we asked for clarification on this.

One LPE told us yesterday evening that they had heard nothing since Kenny Bruce’s email, and that they had not been told that Purplebricks would back down.

They told us: “The story is not whether LPEs are compliant.

“Purplebricks compliance is substantial, it’s that the ID has not been loaded quickly enough or added to the right section of our platform. To make sure people do load it to the right section, no one gets paid.