More than 50 separate businesses have set out their legal position in a formal Letter Before Action sent by solicitors Tollers LLP to Agents’ Mutual’s chief executive Ian Springett.
The estate agents say they believe they were misled by Agents’ Mutual over promises made on joining that their membership package, in particular their subscription fees, would be more favourable than that offered to members who joined at a later date.
However, a spokesperson for OnTheMarket – the portal launched by Agents’ Mutual – last night was dismissive of the challenge, saying there were no grounds for action.
The spokesperson said: “We understand that some agents are considering legal action against Agents’ Mutual for alleged misrepresentations made in relation to pricing policy.
“We have no reason to believe that there are any grounds for such action.
“The board and management team of Agents’ Mutual have at every stage of the company’s inception and development taken appropriate legal advice.”
The letter from the action group sets out the alleged background of events before and after the launch of the OnTheMarket portal and then goes on to claim that these events have damaged their businesses.
The action group members are seeking a number of remedies from Agents’ Mutual including rescission of their contracts and/or damages.
Ian Carson, partner at Tollers LLP, said: “As the Letter Before Action demonstrates, our clients are very serious about their claims against Agents’ Mutual.
“It is hoped that matters can be resolved without recourse to litigation and we have invited Agents’ Mutual to attend a mediation.
“However, our clients are serious about pursuing legal action should it become necessary.”
Nick Crayson, MD of Crayson Estate Agents and a member of the action group, said: “As an early adopter and supporter of Agents’ Mutual, we made a significant commitment of time and money to helping OnTheMarket become a viable competitor to Rightmove and Zoopla.
“However, the way Agents’ Mutual have treated me and my business dismays me and so I am committed to ensuring that they are held to account.”
Examples of the conduct engaged in by Agents’ Mutual alleged in the letter are:
- Offering new joiners a twelve-month or three-year contract rather than a five-year contract;
- A flat fee of only £50 per month per office regardless of volume or location;
- The option to join as a ‘subscriber’ rather than a member, allowing new joiners to leave at any time without future liability;
- Instances where Agents Mutual have removed agents’ properties from OnTheMarket.
Comments (27)
My understanding is that no firms were and are still not being deceived or AM allowing themselves to be open to legal action.
The initial Gold Members (which I have been a member since the beginning) agreed to a payment for five years.
When Z & RM began aggressively targeting clients and trying to contract them for a long period, AM offered a ‘non-membership’ contract to allow those firms to market with OTM for a lower fee. This was discussed at the meeting that I attended and all of the Gold Members present were very supportive of this incentive. All Gold Members I have spoken to had a long term goal in mind and thus were happy to support this from the start. When speaking to those same members, there stance has not changed.
I think the only winners in the legal action will be the solicitors involved !
I do feel that those Gold Members supporting OTM will truly benefit from their support in the long term particularly as membership grows and the portals move towards sellers being able to advertise directly. Why do you think that RM under their new datafeed really asks for the sellers contact details ?
Press always reports OTM/AM have taken legal advice. It might soon be proved wrong on this one.
Onwards there are many others with other angles that have raised issues. Don’t forget the CMA’s open letter in April. A sign that they had started looking closer and no doubt investigating and collecting intel.
This group of agents is just the beginning of different scenario’s yet to emerge. The biggest being ‘anti trust’ matters for anti-competitive AM/OTM actions and embargoes on others.
Trevor if you can be honest and upfront with figures.
What did membership to the INEA stand at 26th January 2015?
What is your membership number with the INEA now?
How many agents left you within the last 18 months (gross figure not net)?
Now if you are being honest with figures i bet you have lost more than 1% of your membership. I also bet you have not grown your membership by almost 50% in the last 18 months.
Does that mean you have ‘Anti Trust’ issues at INEA? – as these are the figures OTM have at present.
Smile the article is about legal action by a group of agents unhappy about different subscriptions they pay at AM/OTM.
I think your tone is unprofessional considering the subject matter of the article.
Maybe you could post here your full details and last 5 year P&L figures. instructions on. SSTC’s sale fall throughts etc etc etc. *** I wouldn’t expect you too as this article is about a group of agents unhappy about different subscriptions they pay at AM/OTM.
At INEA there are no anti-trust matters whatsoever. If an agent isn’t happy, we don’t try and hold them for years on. …. like some service providers may try.
Okay – it’s “Have a giggle” time.
Above, our Mr Mealham mentions ‘…anti-competitive AM/OTM actions…’
Would that be, by any chance, the same Mr Mealham who, on 27 March 2014 – here on the pages of EYE, in response to an article about Rightmove – stated
‘Budget agents shouldnt be allowed in.’?
He repeated the same comment in the replies section of another article – one that related to Ian Springett’s vow not to allow ‘cut-price online agents or similar business models’ onto the OnTheMarket.com site.
On the same thread, in response to another poster, Mr Mealham stated ‘In my view RM and Z should look after proper agents and ban agents offering selling fees anything below £1,000’.
That doesn’t sound exactly pro-competitive, Mr Mealham, does it?
In the same comment string, Mr Mealham also stated ‘I also say there is more to selling homes than sticking them on RM or Z.’
At least we agree on ONE thing.
Just ONE random thread, over two years old – littered with Ratner moments for a certain Mr Mealham.
Some may suggest that the phrase ‘A Mealham Moment’ name will soon become synonymous with industry-related instances where brain desperately needed engaging before pressing ‘Post Comment’.
Not me, of course…
PeeBee. Im not a budget agent fan. I think they can’t provide some better services that premium service agents can offer such as main/sub agency.
The sad fact is that if portals tried to ban budget agents (the market places that traditionals funded) the CMA would end game jump on portals and that would go for INEA too.
Articles 101 and 102 on antitrust clearly dont encourage restraints such as a portal banning say ‘online only’ or any other lawful models, regardless of personal opinions.
My support is for traditionals and chimera models based on higher service levels than the low cost list models.
Equally, ive recently done micro trials as to higher fee main sub agency instances with Countrywide, LSL and quality local independents as main/sub agents.
If budgets opened to additional higher fee offerings where complimentary better consumer seller offerings come in. I wouldnt be adverse to showing a budget that uplifting their fees could actually make a seller more than their ‘we save sellers claims’
Im not a budget low cost fan PeeBee
Mr Mealham – I feel like we are reversing over well-trodden earth – but above you state
‘The sad fact is that if portals tried to ban budget agents (the market places that traditionals funded) the CMA would end game jump on portals and that would go for INEA too.’
Yet I found this on a two year old discussion in ‘The Spectator’:
‘This is now possible in the UK under the INEA mls idx data feed structure where budget agents are not allowed in.’
Maybe you’d better buy some toughened glass for that house you’re living in… or drop the stones. Quick.
Trevor, I am not the one coming out at every opportunity to say how unhappy agents are. As i state above its less than 1% I know i can’t boast that figure and i bet you cannot either.
You however find it necessary to comment on every OTM story and try and paint a picture that OTM is unfair and bordering on illegal practice.
Every time you decide to come on here and unfairly look to run down an offering that benefits our industry (OTM) with scaremonger stories i will look to deflect the attention back to you. Its not nice is it.
By all means come on here and criticize the management or roll out even membership number or the product, but the comments you are coming out with are boarder line lies. Considering Ros is blocking a number of comments regarding onliners i am surprised you can still get away with it.
You have twisted comments made about cartels into something its not. How about i or any other members of the public contact government bodies about unsubstantiated claims about you or any other company. And just because they send back “thanks for the comment but to be honest we think its a mad complaint but to keep you happy we will continue to monitor it” – i or others will go out on public forums and say you or others are boarder line illiegal.
Smile. Google anticompetitive, article 101, 102, antitrust.
Read twice. Three times even. Then look at the AM/OTM restraints and tell me im wrong.
Ignorance is bliss Smile
Agents around the country, and more often than not in the same town pay different rates for both RM & Z and appear happy to do so. OTM needed to grow agent numbers and changed the pricing to help that, just as the others have done, so whats wrong with that? Or would you prefer they do nothing to grow their business. Please, stop whinging about little things and remember why you joined in the first place.
Spoken like an employee of OTM. Do you work there?
£50 per month when others are paying £500 isn’t the same as two different agents in the same part of town lying £900 or £830 on Zoopla or Rightmove and you know it.
Ignorant imput.
With respect Simon, fluter is right.
I know for a fact the agent next door to the branch i am in today pays almost half what i pay to RM and he has more bells and whistles on his membership.
No I don’t work for AM/OTM, I’m a Gold Member actually, Simon Chan. I feel strongly as the great majority of other supporters of OTM that they should do everything reasonable to increase membership in the face face of hostile competition which is doing exactly the same. Please tell me whats wrong with that? I was offered a very low cost Z deal the other week and as Smile Please says, RM are doing the same. You do not know me or anything about me yet you choose to insult me which tells me a lot about you. by the way, where do you advertise and why are you so upset? Legitimate question.
Now I am not a member of OTM so I can’t speak for them but it was my understanding that one of the core concepts was to create an alternative to RM and Z who have unfair practices and aren’t working in the overall interest of the agents but rather their shareholders (who as it happens tend to be the larger corporate businesses in our industry). So to then turn into the thing that you were aiming to counteract, seems a little disingenuous, it’s almost as if someone is profiting from the practices of OTM perhaps.
Considering the ‘shareholders’ of OTM are the Member Agents this comment on face value alone will no doubt attract ridicule on that basis.
I’m here – sitting on the fence… waiting for the next thrilling instalment.
Or is it just another round of smoke and mirrors that has clouded this subject for over three years?
I am well aware that the members are the shareholders that was all part of the deal of being the alternative but their not turkeys voting for Xmas they are on the receiving end of the decisions being taken in the interests of a few at AM with pockets to fill.
Incorrect PeeBee.
The directors of AM are different to the directors of OTM. Different registrations in Companies House
Who mentioned Directors?
Not me – for sure.
I absolutely love puppies. Especially the ones that are all fluffy, or of course those just like the Andrex puppy.
Doesn’t everyone?
(everyone ignore the above – it’s simply a test post to see just how sensitive the spineless eejit who programmed the ‘Auto-Dislike’ is set to… my guess is ‘MaximumPlus’.)
I can understand why some may feel miffed there is a £50 pm contract but remember it is for a limited time not indefinate.
Also would you prefer 5000 members and all paying initial launch price or 7000 paying a variable price for a short period?
OTM needed to do something to grow numbers.
The strategy has worked. Less than 1% of members are unhappy. Can you boast the same on your withdrawn stock?
I am a gold member of AM would be interested in taking to other members abbot the alleged £50 per branch contract and views of other businesses going forward
I think AM are missing the point having the higher legal ground (if indeed) they do is beside the point. They have angered a lot of their members in their actions and to dismiss that out of hand as they can’t be legally challenged by it is both arrogant and foolhardy.
This all hinges on the existence of this £50pm contract.
Anyone seen/got a copy?
Yes.
I’d like to see a copy of this. I’d be very happy to reduce my monthly cost of AM for £50pcm.
It was hyperlinked on an article in EYE a couple of months ago.
http://www.propertyindustryeye.com/almost-300-agents-who-want-to-quit-otm-express-interest-in-legal-action/
Come on – be a love – do the readership a huge favour and explain why you gave this comment a ‘Dislike’.