Agency refuses to return pre-contract deposit - now expelled by TPO

An estate agency trading under two different names has been expelled by The Property Ombudsman after refusing to refund a £2,000 deposit paid by would-be purchasers of a property in Yorkshire.

The case concerned an agency - known as both Secret Property and Wara - and was referred to TPO when potential buyers of a property on the market with Secret Property were unhappy. 

The buyers wished to reserve the property and paid a £2,000 deposit to the agent in March 2017. They said they were assured by the agent that if for any reason they withdrew, the deposit would be refunded. 

However, the buyers did not receive any written acknowledgement of the deposit or the terms and conditions attached to the payment. 

When they subsequently decided not to continue with the purchase and requested for the deposit to be returned, they did not receive a response from the agent, despite sending two letters of complaint via Royal Mail’s ‘tracked and signed for’ delivery service.

TPO requested Secret Property’s company file and submission letter. 

Although a submission letter was sent stating that the buyers were willing to sign a reservation agreement, the agent failed to provide a copy of an agreement to evidence their claim.

“If an agent facilitates a pre-contract deposit, they have an obligation to take into account specific instructions from sellers. Before a deposit is taken, the circumstances under which the deposit is held, refunded, forfeited or used towards the purchase, should be clearly stated in writing, agreed by and issued to the relevant parties” says Katrine Sporle, Property Ombudsman.

“Furthermore there was no evidence to show that the seller had instructed Secret Property to arrange for a pre-contract deposit to be taken, or any written evidence to conclude that the buyers were made aware of the circumstances to which their deposit would be held.”

As a result, TPO directed Secret Property to refund the £2,000 deposit and made a further £300 award in compensation for aggravation, distress and inconvenience caused.

The agent has neither responded nor paid the award and so the firm has now been expelled from TPO.

TPO’s statement concludes: “This means the firm Wara Ltd. trading as Secret Property and Wara, is not registered with a redress scheme, which is a requirement of every sales and letting agent in order to trade legally. However, Secret Property’s website remains active, though inaccessible without signing up, and Wara’s website still has properties listed for sale.”