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Chaos for landlords as Purplebricks evictions rendered invalid

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Purplebricks share price fall, deposit protection scheme, section 21, eviction
Purplebricks share price fall, deposit protection scheme, section 21, eviction

Landlord customers of beleaguered estate agent Purplebricks face more chaos and thousands of pounds in costs as hundreds of evictions running through the courts risk being dismissed.

This comes after a systemic error by Purplebricks where it failed to properly serve documents to tenants regarding the government's deposit protection scheme. Failure to do so has meant landlords, and subsequently the estate agent, must pay up to three times the deposit as recompense.

The Telegraph revealed the online estate agent's error this week and estimated the firm's liability at £30m. However, this newspaper has also learnt that any Section 21, or so-called “no-fault” eviction notice issued by a landlord using Purplebricks cannot pass through the courts.

When a landlord serves a Section 21 notice, they must declare the tenant’s deposit has been properly registered. Therefore, notices served before Purplebricks' error came to light will have been made incorrectly.

Thousands of Purplebricks tenants already evicted via Section 21 notices that were invalid can also claim back up to three times their deposit. This must also be paid for any time the lease was renewed and proper documentation was not served, meaning a renter who renewed twice could claim nine times their deposit as recompense.

Jonathan Davidson, of Broudie Jackson Canter solicitors, said the Purplebricks blunder would cost landlords currently trying to evict tenants another £5,000 on top of the fines for inadequate deposit documentation.

He said: "Landlords will face extra bills if their eviction proceedings collapse, particularly if they have to cover tenants’ legal bills. It will easily cost £5,000 and, at the end of it, the tenant will still be in the property."

Giles Peaker, of Anthony Gold solicitors, said the courts would likely find in favour of the tenant for any ongoing eviction. He added: “Tenants now have a very effective defence. The deposit information can be provided late, but it has to be provided before a Section 21 is served. If it hasn’t, the eviction should fail.”

Chris Norris, of the National Residential Landlords Association, a landlord body, said it would take Purplebricks landlords another six months to correct the paperwork and re-evict their tenants. He added that it was likely landlords using Section 21 were either trying to sell their properties and leave the market or evict tenants for anti-social behaviour.

Mr Davidson said any Purplebricks tenants who had recently been evicted also potentially had legal grounds to have the Section 21 overturned. However the lawyer said any tenant wrongfully evicted in the past had no rights to move back into the property or claim any additional costs other than the deposit fines.

A Purplebricks spokesman said: “As soon as we became aware of this issue, we immediately stopped serving new Section 21 notices. We will be reissuing updated prescribed information so that new Section 21 procedures can commence.”

The issue also only applies to Section 21 “no-fault” eviction notices. Evictions made under Section 8 will still be valid.

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