Monday 13 December 2021 9:27 am | Updated: Monday 13 December 2021 1:37 pm

Purplebricks shares fall by a fifth on £9m bill for tenancy law breaches

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Online letting agent Purplebricks has seen its shares slide by 20 per cent as it faces a possible £9m bill for breaching tenancy law.

The company is in hot water because it failed to communicate to tenants that their deposits were to be placed in a national deposit scheme within 30 days of receiving payment. Tenants are now able to claim back as much as three times the value of their deposit from Purplebricks or their landlords for the failure with the embattled company forced to delay the publication of its financial results.

In a statement today, Purplebricks said: “Early provisional estimates by the Company suggest a potential financial risk in the range of £2m-9m.”

The company said it is in the process of finalising the level of provision required and associated disclosures and has therefore taken the decision to delay its results for the half year ended 31 October 2021 which were due to be published on 14 December 2021.

While today’s statement said that payouts could cost the company as much as £9m a source with knowledge of the business told the Telegraph that Purplebricks’ historic liabilities could be as high as £30m, assuming everyone eligible to make a claim does so.

Purplebricks said that an internal review into the “process issue” which stopped the company from informing tenants about deposit registration would be subject to an ongoing enquiry.

Share price has plummeted by 20 per cent today and is down by 75 per cent this year to date.