High Court Video Transcript Evidence against Gateway Homes UK Ltd and Gateway Homes Nationwide Franchise Ltd (3BM90159), Nick Statman and Malcolm Statman (3BM90158)
Gateway Homes also operate as/have same directors & shareholders as Prop Buy Ltd aka http://www.propertybuyer.co.uk/ , Tom Craven Ltd http://www.tomcraven.co.uk/, Speedy Properties Ltd http://www.speedyproperties.co.uk/ and Online Estate Agent Better Move http://www.bettermove.co.uk/ so beware people when calling them for “independent quotes” – because they won’t be!
Video Transcription of the BBC Inside Out aired 5th November 2012 – Chris Jackson (voiceover) BBC Reporter
Malcolm Haywood – House Seller in Lincolnshire to Gateway Homes
Pat Hardy – House Seller in Teesside to Tom Craven Property
David Lodge – West Yorkshire Trading Standards (over 40 complaints)
Natalie Owen – House Seller In Stoke to Gateway Homes
Sue Owen – House Seller In Stoke to Gateway Homes
Johnathan Smithers – the Law Society
Neil Foster – Royal Institution of Chartered Surveyors
Carol McFarlane – House Seller to Gateway Homes
Of course you can watch the video here too –
CHRIS JACKSON (BBC Reporter): Times are good for Nick Statman, he’s director of Gateway homes UK and eight other property companies. On one of his websites he boasts he owns almost 200 properties, he’s also a keen amateur boxer. From his head quarters in Leeds he runs a network of agents who bring in the customers. Malcolm Haywood wanted to sell his house without delay.
MALCOLM HAYWOOD (House Seller Lincolnshire): What attracted me to Gateway homes was the fact that they offered a service that was going to be quick.
CHRIS JACKSON (BBC Reporter): Gateway agreed a price of £120,000 but just before the deal was done Gateway knocked 30% off the price, he refused to sell.
MALCOLM HAYWOOD (House Seller Lincolnshire): I was very angry indeed because I thought this was going to be a quick method of doing a deal but Gateway homes leave a very nasty taste in ones mouth and every time i open the local paper and see their advertisement it really makes my blood boil.
CHRIS JACKSON (BBC Reporter): He’s not the only one, Pat Hardy from Brotton on Teesside signed the same contract with one of Nick Statman’s other companies, Tom Craven property.
PAT HARDY (House Seller in Teesside): The day before the removal men were to arrive I got a phone call and this gentleman said, oh we’ve got a problem Mrs Hardy. I’d agreed to sell the property at £75,000, they offered me £40,000. I said no, put the phone down.
CHRIS JACKSON (BBC Reporter): Yes you heard right, Tom Craven had slashed its offer almost in half. The next day the price was upped to £50,000, but the deal still collapsed leaving Pat high and dry.
PAT HARDY (House Seller Teesside): They made me feel like I was worthless, like what we had worked for for years and put into the property they were just saying ‘no, it’s worth nothing’.
CHRIS JACKSON (BBC Reporter): Pat found another buyer and sold for £75,000. And we have uncovered many other stories just like Pats, aggressive price drops and long delays.
This trading standards office has received 40 complaints, mostly from the north, which it’s yet to investigate.
DAVID LODGE (West Yorkshire Trading Standards): One of the most common complaints we have had is actually in relation to the actual purchase price, a price has been agreed and then right at the last minute the company have come in and substantially reduced the purchase price and in many cases that has left the vender in a difficult financial position.
CHRIS JACKSON (BBC Reporter): I’ve spoken to a number of people who have told me that Gateway reduced their offer by anything between 16 and more than 50% and remember those adverts promising up to 80% of market value, well we have seen a company document handed to their agents which says ‘typically we pay 25-50% below market value. However you do not want to disclose this fact to the Vendor”. A case of not playing by the book!
Maybe you could stomach the price drop for a quick sale, but even with Gateway that is far from guaranteed despite the advertising.
NATALIE OWEN (House Seller Stoke): The gentleman that first came, he led us to believe that everything would be plain sailing and sorted within a matter of weeks, where in fact it was strung out over a long period of time.
SUE OWEN (House Seller Stoke): It was so worrying for months, not just weeks, month in month out, every single day concern every time you it got to Oh it’ll be there Monday, it wasn’t their Monday, Oh it’ll be there Wednesday Thursday, never there. I was just so worried we had lost everything.
CHRIS JACKSON (BBC Reporter): Natalie was selling the house for her grandmother. She had expected a quick sale; instead she was forced to wait six months before the deal collapsed. Her story is just one of a number we came across.
JONATHAN SMITHERS (The Law Society): These people are vulnerable, they’re desperate to sell that’s why they’re doing it. They want the money and they want it now, the longer it goes on the worse their situation will be. They need the money to pay off creditors, perhaps they’ve lost their job, and perhaps they think they will be repossessed, perhaps they’ve got divorced. They need it now. So the longer it goes on the greater the bargaining position will be in favour of the company, not of the individual so it’s almost an incentive on the company to drag it out because it will make the seller more desperate to accept their much lower offer.
CHRIS JACKSON (BBC Reporter): So, why didn’t Natalie just walk away?
Like all Gateways Vendors, Natalie had signed a contract lasting twelve months. She believed she had no choice but to sell to Gateway.
This is the contract and helpfully at the bottom it says this document is binding and should be signed only if you understand the contents. Well the point is no one would have signed if they had.
NEIL FOSTER (RICS): A contract which would of lasted for seven, ten or fourteen days would seem quite reasonable but something that ties the home owner in for up to a year, for what was supposed to be a speedy transaction, isn’t quite in keep with what was offered.
JONATHAN SMITHERS (The Law Society): It’s a really very badly drafted document. Whoever wrote it had no intention of being fair between the seller and the buyer, there’s no balance in it what so ever, it’s entirely in favour of the buyer. I think actually that it’s so badly written that it’s probably unenforceable.
CHRIS JACKSON (BBC Reporter): The contract allows Gateway to walk away for any reason it likes, literally any reason and it doesn’t have to stick to the price it quotes at the top. For some it’s time for government intervention.
NEIL FOSTER (RICS): RICS would definitely like to see regulation brought to bear in this sector of the market. It would then at least provide a point of reference and a code of conduct for home owners to refer to.
CHRIS JACKSON (BBC Reporter): (The contract) It allows Gateway the right to market the property for sale to a third party before it’s even bought it. That’s exactly what happened to Carole McFarlane.
CAROL MCFARLANE (House Seller to Gateway Homes): I lost my business so we was in a bit of a bad way at the time, so it seemed an easier solution.
CHRIS JACKSON (BBC Reporter): After long delays, a price drop and feeling trapped by her contract, Carol was shocked to find that her house was being advertised for sale on the internet for £50,000 more than what she was being offered.
CAROL MCFARLANE (House Seller to Gateway Homes): We was just amazed really, I mean it’s terrible. I’ve lived six almost seven months of a nightmare, unbelievable.
CHRIS JACKSON (BBC Reporter): Carol did eventually sell her house to Gateway but it was anything other than quick. Nine months of waiting.
We wanted to put the concerns raised to Gateway homes. Nick Statman declined our invitation for an interview, but he did issue a statement.
It says Gateway has helped ‘thousands of satisfied homeowners’ and the actual number of complaints are ‘well below one percent’. It says trading standards have ‘never investigated Gateway homes and have no plans to’ and none of the enquiries to Watchdog have been ‘formal complaints’, many are simply ‘pre-shopping enquiries’. What about that contract and the advice given to its sales agents? Well Gateway homes say it offers ‘full transparency from day one’ and the initial contract is ‘jargon free and easy for a customer to understand without the need for legal advice’. It is separate from a ‘formal sales contract’. And then there are those last minute price drops of up to 50%. Well Gateway says that’s because ’on occasion… a revised offer is necessary’ after a valuation from a surveyor the customer is ‘free to walk away’. Finally, the delays of up to nine months on the promised quick sales? Gateway says that involves just a minority of cases with ‘unforeseeable delays during the conveyancing process’ and that their services are ‘greatly appreciated by many customers’.
So what is the advice to anyone considering selling their house this way?
NEIL FOSTER (RICS): Take independent advice before they get into any negotiation with a company about a contract to sell a property.
JONATHAN SMITHERS (The Law Society): The very first thing I would say to them is ‘are you absolutely sure you have to do this, have you explored every other avenue? Because this is a very nuclear strategy if you like, once you’ve sold the house it’s gone’.
NATALIE OWEN (House Seller Stoke): My advice would be please please please do not go anywhere near Gateway homes. These companies do not do what it says on the tin.