Reading Estate Agent Fined £30,000

A Reading estate agent has been fined £30,000 for waiting until minutes after a sale was completed to tell buyers of a flat that cladding on the outside of the building contained Aluminium Composite Material (ACM).

Haslams Estate Agents limited was sentenced at Reading Magistrates Court on October 25th, following a successful prosecution by Reading Borough Council. The private flat in Hanover House, Kings Road, was marketed locally by Haslams, on instruction by Savills Estate Agents on behalf of the owner. The buyers had an offer accepted on the property in October 2017. On November 3rd 2017, an inspection of Hanover House found that the building’s cladding contained ACM, similar to the material found on the Grenfell Tower. While there was no immediate danger, measures were put in place to reduce risk, including closing the building car park. Haslams - which also let several flats in the block - was sent the information on ACM the same day as the inspection (Nov 3rd 2017). This was before the date on which the buyers exchanged contracts. The information about the ACM cladding then sat with its lettings team and was not shared with its sales team. When news of the ACM cladding became public on November 16th, the Haslams sales team attempted to get instructions from Savills on what steps it should take. The sale was completed on the following day (Nov 17th). Half an hour after collecting the keys, the buyers were told by the Haslams sales team about the ACM. The only way the buyers could have found out about the ACM was from Haslams or from the seller, as it is not an issue highlighted by usual conveyancing searches. The buyers subsequently made clear they would have withdrawn from the sale had they been made aware before completion. At this time there was no Government agreement in place to deal with ACM cladding. It meant the buyers faced unknown costs, potentially running into tens of thousands of pounds. The buyers complained to Reading Borough Council’s Trading Standards team which investigated on their behalf. Haslams pleaded guilty at the earliest opportunity and offered in mitigation that it was of previous good character, had compensated the buyers for management fees and loss of car parking, co-operated fully with the investigation and that a Government scheme was now in place that should manage the costs of replacing the cladding. Haslams told magistrates that it had also taken action to improve communications between its lettings and sales teams and that it makes significant contributions to local charitable causes. Haslams was fined £30,000 and ordered by magistrates to pay costs of £2,646 and a victim surcharge of £170.

Cllr Ellie Emberson, Lead Member for Corporate and Consumer Services said:

“This was an important prosecution which involved a business failing to pass on critical information to a consumer, which has understandably caused them a high level of stress and anxiety. “The fine should serve as a reminder to businesses. The Council’s Trading Standard’s team has welcomed Haslams' response to the investigation and the improvements it has made to prevent it happening again.”