Estate Agent selling daughters property is probably insolvent - WARNING!

[Guest]

In April an estate agent found a buyer for my daughter's leasehold maisonette. They and her solicitor urged her to complete the sale and move out by the weekend just passed (21/22 May). A problem arose concerning double glazing* and daughter did not complete. Enquiries now reveal that the estate agent has, since 25 November 2015, been in an involuntary arrangement with HMRC. (The Property Ombudsman says "involuntary", Companies House website says "voluntary"). A strike out notice is going into the Gazette tomorrow. The firm apparently owes HMRC in the region of £277,000.

Enquiries reveal that there are three companies, xxxx xxxx east, xxxx xxxx west, as well as xxxx xxxx ltd. East and West are registered as estate agents whilst Ltd is registered as a management company to whom all monies must be paid. The Property Ombudsman has advised daughter not to complete the sale until after the end of the strike out period (two months) because she may find herself paying commission twice - once to the management company and secondly to HMRC, the main creditor.

*The estate agent untruthfully told the prospective buyers that the landlord is going to have new windows installed in the property. It looks as though this may have been an inducement to the prospective purchasers to agree to buy and that the estate agent was hustling daughter to complete the sale without her knowing about the "promise" to install new windows.

Can anyone advise on (a) should my daughter pull out of the sale and if so to what extent she would be liable for commission, VAT and marketing costs, (b) should daughter disclose the above to the potential purchasers via solicitors, thereby giving them the opportunity to pull out or proceed at a later date, (c) If the potential purchasers pull out, to what extent could my daughter be held financially liable?

This is a private firm and I hope it is a cautionary tale to anyone selling their property.

Thank you in advance for any advice you are able to offer.

[Openlaw15]

Re: Estate Agent selling daughters property is probably insolvent - WARNING!

In April an estate agent found a buyer for my daughter's leasehold maisonette. They and her solicitor urged her to complete the sale and move out by the weekend just passed (21/22 May). A problem arose concerning double glazing* and daughter did not complete. Enquiries now reveal that the estate agent has, since 25 November 2015, been in an involuntary arrangement with HMRC. (The Property Ombudsman says "involuntary", Companies House website says "voluntary"). A strike out notice is going into the Gazette tomorrow. The firm apparently owes HMRC in the region of £277,000.

Enquiries reveal that there are three companies, xxxx xxxx east, xxxx xxxx west, as well as xxxx xxxx ltd. East and West are registered as estate agents whilst Ltd is registered as a management company to whom all monies must be paid. The Property Ombudsman has advised daughter not to complete the sale until after the end of the strike out period (two months) because she may find herself paying commission twice - once to the management company and secondly to HMRC, the main creditor.

*The estate agent untruthfully told the prospective buyers that the landlord is going to have new windows installed in the property. It looks as though this may have been an inducement to the prospective purchasers to agree to buy and that the estate agent was hustling daughter to complete the sale without her knowing about the "promise" to install new windows.

Can anyone advise on (a) should my daughter pull out of the sale and if so to what extent she would be liable for commission, VAT and marketing costs, (b) should daughter disclose the above to the potential purchasers via solicitors, thereby giving them the opportunity to pull out or proceed at a later date, (c) If the potential purchasers pull out, to what extent could my daughter be held financially liable?

This is a private firm and I hope it is a cautionary tale to anyone selling their property.

Thank you in advance for any advice you are able to offer.

Why would you disagree with the Property Ombudsman?

[Guest]

Re: Estate Agent selling daughters property is probably insolvent - WARNING!

Why would you disagree with the Property Ombudsman?

Sorry for not explaining properly.

My daughter and I are extremely grateful for information provided by the Property Ombudsman Service. The situation only came to light after an Ombudsman took it upon himself to look up the estate agent on the Companies House register.

What I should have asked is, given the advice from the Ombudsman, what is the best way for my daughter to extricate herself from this situation and minimise her financial losses.

Thank you.

[Openlaw15]

Re: Estate Agent selling daughters property is probably insolvent - WARNING!

Sorry for not explaining properly.

My daughter and I are extremely grateful for information provided by the Property Ombudsman Service. The situation only came to light after an Ombudsman took it upon himself to look up the estate agent on the Companies House register.

What I should have asked is, given the advice from the Ombudsman, what is the best way for my daughter to extricate herself from this situation and minimise her financial losses.

Thank you.

What has the Ombudsman advised?

[Guest]

Re: Estate Agent selling daughters property is probably insolvent - WARNING!

What has the Ombudsman advised?

Information and advice from the Ombudsman
The firm has three arms - the Ltd company manages the estate agents and are the firm to which all monies must be paid. The Ltd company has been subject to an involuntary (Companies House info says voluntary) agreement since 25 November 2015. DO NOT UNDER ANY CIRCUMSTANCES pay them any money. This means not exchanging or completing the sale. If exchange/completion is unavoidable, ask your solicitor to put the money (commission plus VAT) into a client account and make sure they understand that they are not to give the money to the firm, but wait for a formal invoice probably from HMRC telling them where to send the money.

The other two arms are xxx East and xxx West. On 24 May the Gazette will carry notices of a Strike Off action for both firms. The strike off is valid for two months.

This is something you should get compensation for but we can't help you for the following reason. They have not acknowledged your complaint because they are not collecting any mail from the Postoffice. Normally you could come to us after eight weeks with your proof of posting the complaint and we would investigate. In this case we cannot investigate because the eight weeks is the same length of time as the strike-off period and by the end of that they will not exist.

Make sure you discuss this matter with Companies House and your solicitor.

Information and advice from Companies House and a bankruptcy practitioner

The Strike-off notices will go in the Gazette on 24 May. A warning notice has already been published.

Do not exchange contracts, do not complete on the sale Do not pay them any money.

The reason is the Ltd Company is not entitled to receive any money as any payment must go to their creditors. If you pay them, you can be sued as follows -
1 - HMRC to whom they owe £277,020 will come after you for money even if you have already paid it to the ltd company.

2 - Because xxx East and xxx West are registered estate agents, any individual employee will be able to sue you for commission if you exchange contracts and complete the sale.

Solicitor
I've never come across this before. I will have to get advice.

If we exchange and complete, I will have to pay the Ltd Company - we MUST pay whoever has sent us the invoice. We cannot under any circumstances put the money in a client account.

(The Ltd company issued their invoice at the beginning of May when they were bullying my daughter into completion by the weekend of 20-22 May)

the Ltd company's bankruptcy practitioner
If you exchange and complete your sale, there is a strong possibility that not only will you pay the Ltd Company but that you will also be liable to pay the same money (commission plus VAT) to any creditor (three including HMRC) and any employee.

[Openlaw15]

Re: Estate Agent selling daughters property is probably insolvent - WARNING!

Sorry for not explaining properly.

My daughter and I are extremely grateful for information provided by the Property Ombudsman Service. The situation only came to light after an Ombudsman took it upon himself to look up the estate agent on the Companies House register.

What I should have asked is, given the advice from the Ombudsman, what is the best way for my daughter to extricate herself from this situation and minimise her financial losses.

Thank you.

A Ltd Company is the legal identity of the company despite other names the company has. The way I understand it is if the Ltd company is in liquidation, then the trustee (for the bankruptcy) has control over all commercial transactions the Ltd company's interests. So, no she cannot enter into a contract with the insolvent company, ie cannot sell her leasehold interest to the liquidated company. She could claim for her losses against the trustee of the liquidated Ltd company, thereby making her a creditor. The liquidator as trustee (for said company) could still honour the agreement to the interested purchaser and explain the windows issue, or the trustee could find another buyer of the maisonette's lease (as it may be in the trustee's interest.