The Property Ombudsman is one of the Redress Schemes brought about by the changes in the Estate Agents Act in 2008.
As of October 2008, any Estate Agent who deals with residential property ('residential property' being any property where all or part of it is used as a dwelling) were legally bound to join a scheme.
A number of complaints were made to Trading Standards because RTA had not joined a Redress Scheme and, in September last year, RTA joined The Property Ombudsman (TPOS).
Many of our members felt that this was a hollow victory because TPOS had indicated that they were unable to look at any complaints where the contract had been signed prior to the September 2011 joining date.
However, following discussions with TPOS, we were informed that they will look at complaints about RTA's Complaints Handling Process, regardless of when the contract was signed. Of course, your complaint needs to have been raised after the date that RTA joined TPOS and you will also need to progress your complaint through TPOS within their published timescales.
Most of you will know that we always suggest that the first step in any dispute is to document a formal written complaint to the company involved - how else can the issues be resolved amicably? However, more often than not, an unsatisfactory response was received from RTA (usually Paul O'Reilly) which did not mirror the approach documented in RTA's complaint handling procedure or no response was received at all.
Well, now there is 'redress' and members have been successfully taking complaints to The Ombudsman.
You'll find details of the complaints process here - http://www.tpos.co.uk/make_complaint_sales.htm
The complaints form and guidance can be found in the list on the right.
eMail your complaint in the first instance to admin@tpos.co.uk
Good luck
Tuesday, 26 June 2012
Monday, 23 April 2012
‘Pre-shopping advice’ for small businesses thinking of putting their premises up for sale
If you are
thinking of selling your business you may want to advertise it yourself in a
newspaper or specialist commercial property paper or you may be considering
using an agent.
Selecting an Agent:
As with any
service you are considering purchasing we would offer the following advice –
Try to get recommendations from people who have recently sold
premises.
Check out any
firms you are thinking of employing using the resources available to you (your
trade association, the FSB, internet forums, etc).
Use your common
sense – offers of free valuations / free surveys / market appraisals etc will
result in a sales rep visiting and talking to you about signing up with them to
market your premises.
As with any other
business dealings, get several valuations and make sure you are realistic about
the state of the market and the appeal of your business. Do not automatically
sign up with the agent that suggests the highest selling price can be achieved
without giving this careful thought.
Check what exactly
the agent will do to market the property – do they just put it on a website
with minimal details available to potential buyers or do they produce detailed
property particulars with all the information you would want to see if YOU were
looking to buy a property? What about measurements, photos, floor plans? How is
their website promoted? Did you know about it before they contacted you?
Check out how
good the agent is at promoting premises for sale - Using your local knowledge
find a property in your area with the Agent’s board up, or ask your
contacts. Check with the seller to see
if they have had any interest via the Agent.
Imagine you are a
potential buyer for that TYPE of business and do a general search on the
internet (eg, look for that type of business for sale in the town you are in).
After you do a general search go onto the agent’s website and search there. Did
either search actually reveal the property particulars for the business you
know they are supposed to be marketing? If you had any problems finding the
premises (and bearing in mind that you KNEW that it was on the market), do you
think other people will find yours?
If you do your
research and select a few agents to speak to make sure you find out BEFORE you
sign exactly what their terms are. Do not take a sales rep’s word for it, they
know what you want to hear and may be tempted to say things they cannot
deliver. If there is any dispute the
written terms will usually out-weigh anything the rep may have said.
Before you sign up:
It is vital to remember that as a business
you do not have a right to cancel a contract (unlike consumers, who, in some
instances, have a ‘cooling off period’). Once you agree to the contract you are
bound by the terms (except in very limited circumstances and only if you
take a case to Court and they decide otherwise), so read the terms thoroughly
and make sure you understand the full implications before signing. In
particular check the terms to see if they clarify the matters below:
Does the contract
indicate what service the agent will provide?
Do the terms look
straight forward or are they overly complicated?
Does the contract
confirm that the Agent has valued the premises (if not, why not?)?
What fees do you
have to pay upfront?
How long will you
be locked into the contract with no chance of ending it?
When and in what
circumstances can you end the agreement?
If do not want the contract to continue
after the initial set period you MUST write to the Agent to confirm
termination, send the letter recorded
delivery and keep copy. Keep a copy of the tracking confirmation.
Otherwise they WILL chase you for money if the business is sold (as they will
still have sole selling rights while this continuing contract is in
place).
When and in what
circumstances can the Agent terminate the agreement? [Does the Agent say he can terminate the agreement for any
reason whatsoever? Does he then expect you to pay a fee whether or not he has
upheld his side of the agreement?
What fees do you
have to pay if you or the Agent end the agreement? [If the agent suggests that you agree to a higher termination fee ask
yourself why].
What happens if
you find a buyer yourself, do you have to pay the Agent’s fee? If the contract says the Agent has sole
selling rights then you will still have to pay them even if they did not
introduce you to the buyer.
Is there a term
relating to the need for you to obtain an Energy Performance Certificate (EPC) for the premises? You must have commissioned an EPC (ordered
it from an approved Energy Assessor) before the premises can be marketed
and you have 7 days to get it. You do have a further 21 days following that to
obtain the certificate but after that time is up the Agent will not be able to
market the property if there is no EPC. If
they cannot market the property they are going to want to end the agreement and
may seek to charge you fees]
Are the written
terms printed on both sides of the agreement?
Have you read and understood them all, and are you happy with them? Do not agree to them unless you are sure.
If you have any concerns do not be
persuaded to sign anything – ask for a copy of the terms (get the rep to write
‘sample’ across all copies of them) – and study them at your leisure. There is
no need to sign up on the day and if you are being distracted or feel rushed
stop and ask yourself why you are being put in this position.
It is not uncommon for
small businesses so say that they were reluctant to sign up on the day but
found themselves committing to the contract anyway and later regretted it. If
you have nagging doubts there really is no need to commit on the day, make some
further checks and take time to think about it properly.
Payment:
If you pay by credit
card you may have more protection should things go wrong. Section 75 of the
Consumer Credit Act 1974 makes the credit card company jointly liable for any
breach of contract or misrepresentation if the goods or services cost more than
£100 and you are an unincorporated business (a sole trader or partnership).
Energy Performance Certificates
Before you put
your business premises on the market you MUST commission (order) an Energy
Performance Certificate (an EPC) from an Approved Energy Assessor. You can find
more details about this on the DCLG website at www.communities.gov.uk/planningandbuilding/sustainability/energyperformance/ndepcs/
You must make available the valid EPC to anyone requesting written
details and to anyone who wishes to view the property. There are very limited
circumstances when you do not have to do this – for more details please see www.businesslink.gov.uk/bdotg/action/layer?topicId=1082081368
Unlikely though
it is, if you get an offer from someone who has not viewed, you must make the
EPC available to them at that time (if that is the earliest opportunity for you
to provide it).
At the time of
sale you must provide the purchaser with the valid EPC.
Trading Standards North West Property Work Group
Saturday, 21 April 2012
RTA vs Guy Davies ~ Permission To Appeal GRANTED
In the case of RTA (Business Consultants) Limited versus Mr Davies.
As many of you know, Mr Davies had put in an application for permission to appeal and we were awaiting the decision of the Lord or Lady in the High Court.
Guy has received notification today via an Order from the court and permission to appeal has been granted.
We'll keep you posted on the next steps.
As many of you know, Mr Davies had put in an application for permission to appeal and we were awaiting the decision of the Lord or Lady in the High Court.
Guy has received notification today via an Order from the court and permission to appeal has been granted.
We'll keep you posted on the next steps.
Wednesday, 21 March 2012
2012 Budget
The 2012 Budget is available in full from HM Treasury website here - http://cdn.hm-treasury.gov.uk/budget2012_complete.pdf
RTA vs Guy Davies / Trading Standards
RTA vs Guy Davies
Guy has forwarded an email from the High Court in London which states that his appeal is awaiting allocation to a Lord/Lady Justice and that this will take 4-5 weeks.
For those of you who are relying (whether in full or in part) on the consumer argument, this is an important case to follow.
All cases relying on the consumer argument have been stayed since the January appeal case. If you think your case should be stayed then please write to RTA in the first instance and ask them to agree to the stay. Our members have so far been unable to get RTA to agree to stay a case. If this happens in your case then you will need to apply to the court.
It makes no sense to carry these cases all the way to a hearing just for them to be stayed at that stage.
If you need assistance in drafting letters, please let us know.
The £7,000 costs awarded to RTA at the appeal are to be appealed through the new High Court appeal case and Judge MacKenzie at Worcester has provided some notation from the CPR which will help with this.
In addition, Guy will also be attempting to recover those costs through his Small Claims case. Correspondence suggests that RTA were not at first aware of the implications of the fraudulent misrepresentation argument but will now withdraw the case rather than answer that claim. We'll keep you posted on this.
Thankyou to those of you who have forwarded your letters where RTA claim that Guy only owed them £500. As most of you know, RTA were claiming more than £2,000.
Trading Standards
A number of you have received correspondence from RTA where they claim that Staffordshire Trading Standards are investigating CEBTA.
This is not true.
RTA made a complaint to Trading Standards but no action was taken.
Although it is unclear exactly what the complaint was, it appears that RTA are unhappy that you make donations to the Group.
On 13th March 2012, Dawn made Mr O'Reilly (of RTA) aware that no investigation was taking place.
On 19th March 2012 Staffordshire Trading Standards formally confirmed that no investigation was taking place.
If any of you receive correspondence after the 19th March which makes this claim then please pass your letter to us and a formal complaint will be made to Trading Standards.
Guy has forwarded an email from the High Court in London which states that his appeal is awaiting allocation to a Lord/Lady Justice and that this will take 4-5 weeks.
For those of you who are relying (whether in full or in part) on the consumer argument, this is an important case to follow.
All cases relying on the consumer argument have been stayed since the January appeal case. If you think your case should be stayed then please write to RTA in the first instance and ask them to agree to the stay. Our members have so far been unable to get RTA to agree to stay a case. If this happens in your case then you will need to apply to the court.
It makes no sense to carry these cases all the way to a hearing just for them to be stayed at that stage.
If you need assistance in drafting letters, please let us know.
The £7,000 costs awarded to RTA at the appeal are to be appealed through the new High Court appeal case and Judge MacKenzie at Worcester has provided some notation from the CPR which will help with this.
In addition, Guy will also be attempting to recover those costs through his Small Claims case. Correspondence suggests that RTA were not at first aware of the implications of the fraudulent misrepresentation argument but will now withdraw the case rather than answer that claim. We'll keep you posted on this.
Thankyou to those of you who have forwarded your letters where RTA claim that Guy only owed them £500. As most of you know, RTA were claiming more than £2,000.
Trading Standards
A number of you have received correspondence from RTA where they claim that Staffordshire Trading Standards are investigating CEBTA.
This is not true.
RTA made a complaint to Trading Standards but no action was taken.
Although it is unclear exactly what the complaint was, it appears that RTA are unhappy that you make donations to the Group.
On 13th March 2012, Dawn made Mr O'Reilly (of RTA) aware that no investigation was taking place.
On 19th March 2012 Staffordshire Trading Standards formally confirmed that no investigation was taking place.
If any of you receive correspondence after the 19th March which makes this claim then please pass your letter to us and a formal complaint will be made to Trading Standards.
Monday, 27 February 2012
More stories from the Mirror
After a brief absence, it's time to welcome back RTA "business sales specialists".
We revealed last summer how the firm's manager Ceri Edwards admitted its contracts were "draconian" and "heavily weighted in RTA's favour".
Previously we've told of clients whose businesses were not sold but RTA still demanded huge fees. Now Manchester pizza shop owner Hiwa Ali is celebrating after being sued by RTA when he refused to pay £3,000 plus VAT on top of his £117.50 upfront fee. After a brief absence, it's time to welcome back RTA "business sales specialists". We revealed last summer how the firm's manager Ceri Edwards admitted its contracts were "draconian" and "heavily weighted in RTA's favour".
Previously we've told of clients whose businesses were not sold but RTA still demanded huge fees. Now Manchester pizza shop owner Hiwa Ali is celebrating after being sued by RTA when he refused to pay £3,000 plus VAT on top of his £117.50 upfront fee.
The firm wrote to him saying: "The agreement was to remain in force until revoked in writing by registered or recorded delivery and at no time have you sought to withdraw our instructions and therefore the agreement remained in force. "We attempted to make arrangements for a party to view only to be informed that a sale of the business has now taken place."
But Mr Ali became fed up with Stockport-based RTA precisely because no one had come to view his shop, blaming the firm for valuing it at £48,500 when he suggested £36,000 was nearer the market price.
With the help of a friend, Mr Ali, who has poor English, launched a counterclaim for £5,000, saying "it must have been obvious" to RTA's sales rep that he did not understand what he was signing.
His friend pleaded: "Four and a half months after signing the contract, Mr Ali was in dire financial straits but there had not been a single viewing or offer for City Pizza. "Since RTA did not sell the shop, the defence submits Mr Ali does not owe RTA £3,000."
Result: RTA's claim, and Mr Ali's counterclaim, were both thrown out.
Andrew Penman of The Mirror
http://blogs.mirror.co.uk/investigations/2012/02/and-welcome-back-to-the-column.html
We revealed last summer how the firm's manager Ceri Edwards admitted its contracts were "draconian" and "heavily weighted in RTA's favour".
Previously we've told of clients whose businesses were not sold but RTA still demanded huge fees. Now Manchester pizza shop owner Hiwa Ali is celebrating after being sued by RTA when he refused to pay £3,000 plus VAT on top of his £117.50 upfront fee. After a brief absence, it's time to welcome back RTA "business sales specialists". We revealed last summer how the firm's manager Ceri Edwards admitted its contracts were "draconian" and "heavily weighted in RTA's favour".
Previously we've told of clients whose businesses were not sold but RTA still demanded huge fees. Now Manchester pizza shop owner Hiwa Ali is celebrating after being sued by RTA when he refused to pay £3,000 plus VAT on top of his £117.50 upfront fee.
The firm wrote to him saying: "The agreement was to remain in force until revoked in writing by registered or recorded delivery and at no time have you sought to withdraw our instructions and therefore the agreement remained in force. "We attempted to make arrangements for a party to view only to be informed that a sale of the business has now taken place."
But Mr Ali became fed up with Stockport-based RTA precisely because no one had come to view his shop, blaming the firm for valuing it at £48,500 when he suggested £36,000 was nearer the market price.
With the help of a friend, Mr Ali, who has poor English, launched a counterclaim for £5,000, saying "it must have been obvious" to RTA's sales rep that he did not understand what he was signing.
His friend pleaded: "Four and a half months after signing the contract, Mr Ali was in dire financial straits but there had not been a single viewing or offer for City Pizza. "Since RTA did not sell the shop, the defence submits Mr Ali does not owe RTA £3,000."
Result: RTA's claim, and Mr Ali's counterclaim, were both thrown out.
Andrew Penman of The Mirror
http://blogs.mirror.co.uk/investigations/2012/02/and-welcome-back-to-the-column.html
Wednesday, 8 February 2012
To what extent is the number of businesses on an agent's books a reliable indicator of their reputation?
Here's an interesting question I found on the BusinessTransferAgents.co.uk website today.
"To what extent is the number of businesses on an agent's books a reliable indicator of their reputation?"
Interesting isn't it?
So, if I Sell Em Quick Limited has 250 businesses on it's books and Sold Within 48 Hours Limited has 2,500 businesses on it's books, would you assume Sold Within 48 Hours Limited to be the better agent?
Here's what some of the UK's leading Business Transfer Agents had to say about it:-
"It's not the number of listings an agent has that's important; it's his track record on the number of businesses he's sold.
"You could have an agent with 100 listings but who's sold 90 of them. Or you could have an agent with 1,000 listings but has only made 100 sales.
"It's not the volume of listings, it's the back-up service they're able to provide.
"If an agent has 7,000 businesses on their books, how many days are they actually devoting to each client? That works out at about 10-15 minutes dedicated to each client every year, and if they have a sale going through they won't be devoting any time.
"It's always an issue with agents: they want enough businesses to sell to give the buyer choice, but eventually the workload can become too much so they have to start employing people to deal with it."
"The advantage of having a lot of listings is that it tends to attract a lot of traffic, so it's like the circulation of a newspaper: if it has a lot of readers it improves the business' exposure and I think that makes a big difference. It also means the agent has the financial strength to advertise more widely and expose the business to the widest audience."
"In my opinion the more listings a business broker has can often mean the less they care about individual owners and selling their business. Some large business brokers only sell a small percentage of the businesses they list, and it can be the case that one 'negotiator' is handling the sale of 100 or more businesses!
"On the other hand, some one-man band operators offer a very poor quality of service.
"The number of listings has nothing to do with how effective an agent will be in selling a business and should not be a consideration for a business owner looking for an agent."
"You can look at it both ways. Some agents have pages and pages of listings, which looks impressive, but how many do they actually sell?
"Conversely, it can look like you're a big player in the market if you have lots of listings. For anyone looking for an agent, it's not the number of listings they have, but comparables on what they've sold recently.
"If I came across an agent with thousands of businesses I'd think I'm just another number to them. How much attention are they going to pay me?
"If you go with an agent with a manageable number of listings, you'll have some personal attention – which is what vendors like."
"To what extent is the number of businesses on an agent's books a reliable indicator of their reputation?"
Interesting isn't it?
So, if I Sell Em Quick Limited has 250 businesses on it's books and Sold Within 48 Hours Limited has 2,500 businesses on it's books, would you assume Sold Within 48 Hours Limited to be the better agent?
Here's what some of the UK's leading Business Transfer Agents had to say about it:-
"It's not the number of listings an agent has that's important; it's his track record on the number of businesses he's sold.
"You could have an agent with 100 listings but who's sold 90 of them. Or you could have an agent with 1,000 listings but has only made 100 sales.
"It's not the volume of listings, it's the back-up service they're able to provide.
"If an agent has 7,000 businesses on their books, how many days are they actually devoting to each client? That works out at about 10-15 minutes dedicated to each client every year, and if they have a sale going through they won't be devoting any time.
"It's always an issue with agents: they want enough businesses to sell to give the buyer choice, but eventually the workload can become too much so they have to start employing people to deal with it."
"The advantage of having a lot of listings is that it tends to attract a lot of traffic, so it's like the circulation of a newspaper: if it has a lot of readers it improves the business' exposure and I think that makes a big difference. It also means the agent has the financial strength to advertise more widely and expose the business to the widest audience."
"In my opinion the more listings a business broker has can often mean the less they care about individual owners and selling their business. Some large business brokers only sell a small percentage of the businesses they list, and it can be the case that one 'negotiator' is handling the sale of 100 or more businesses!
"On the other hand, some one-man band operators offer a very poor quality of service.
"The number of listings has nothing to do with how effective an agent will be in selling a business and should not be a consideration for a business owner looking for an agent."
"You can look at it both ways. Some agents have pages and pages of listings, which looks impressive, but how many do they actually sell?
"Conversely, it can look like you're a big player in the market if you have lots of listings. For anyone looking for an agent, it's not the number of listings they have, but comparables on what they've sold recently.
"If I came across an agent with thousands of businesses I'd think I'm just another number to them. How much attention are they going to pay me?
"If you go with an agent with a manageable number of listings, you'll have some personal attention – which is what vendors like."
You can see the full details here
Some interesting points.
"..the more listings a business broker has can often mean the less they care about individual owners and selling their business.."
"If an agent has 7,000 businesses on their books, how many days are they actually devoting to each client?"
"The number of listings has nothing to do with how effective an agent will be in selling a business"
So, just because an agent has lots of businesses on its books, doesn't necessarily mean that they are good at selling. But we already knew this, didn't we? Learnt the hard way.
You might be interested in Ceri Edward's "7 tips if you are thinking of selling your business". In view of the comments above, point 5 should be expanded...
E) Find out how many businesses your agent sold in the last 12 months compared to how many businesses the took on
RTA vs Guy Davies ~ update
RTA vs Guy Davies - Judgement transcript now available
For those of you who were looking for the details of the Judgement of the appeal hearing in the case of RTA vs Guy Davies (11th January 2012), the transcript is now available in the CEBTA Members Area here - just follow the link.
You'll also find an update with regards to Guy's appeal of this decision.
"Consumer Law" ~ statements from RTA
A number of defendants and clients have received a notification from RTA entitled "Consumer Law" which provides some brief information about the above case.
In this document, RTA make the following statement
"...any future case where the defence is "I am a consumer" will be dismissed and judgement will be awarded to RTA"
This statement is misleading as a number of you have asserted from this that this 'dismissal' is automatically done by the court and that you will automatically get a Judgement in default.
This is not the case...
In almost all of your cases (for those of you who are in the middle of court proceedings) you have not just used the "I am a consumer" argument as you have many other issues - so this will not apply to you.
However, the court can make any decision it sees fit without a hearing. Not just about this decision but about anything at all, as defined in the Civil Procedure Rules, etc. But, in order for any defence to be dismissed it would be usual for the claimant to make an application to the court to do this. The court would then make a decision but it's important to remember that the overriding objective of the court is to be fair to both parties. So it's highly unlikely that your defence would be automatically dismissed or that you will automatically get a judgement in default.
But if you are worried about this then contact the CEBTA people who will help you make an application to the court to amend your defence - it's as simple as that!
You might like to email this "Consumer Law" document to Jayne Stubbs at Stockport Trading Standards along with your views on whether or not you thought it was misleading, and a summary of your story.
When is a Landmark Case not a Landmark Case?
It is interesting to note that RTA refer to this as a 'landmark case'. This author is wondering why RTA failed to recognise the case of RTA vs Gill Draper (which was also a decision made in a Higher Court) as a landmark case....
After receiving the decision in the Appeals Court of Judge De Mille in the case of RTA vs Draper where Judge De Mille agreed that the client was a consumer under these circumstances, RTA still argued that this wasn't the case.
In any case the decision of Judge Rundell in RTA vs Guy Davies is currently being appealed and you should inform your judge of this fact in your hearings.
Guy will keep us informed of progress.
Wednesday, 1 February 2012
I want to sell my business ~ what should I do?
There are plenty of business transfer agents (or business brokers) out there who are not just in it for the upfront fee or withdrawal fee. In fact, most business transfer agents are as keen to sell your business as you are.
So what should you do?
Many Business Brokers are members of the Federation of Business Brokers. Take a look at the FBB website for details of their members.
Also, try the Business Transfer Agents website.
Is the broker asking for an upfront fee?
If the Broker wants an upfront fee, ask what it's for.
If it's an advance payment for advertising, well that's fair enough, isn't it? The quicker your business goes on the market then the more prodpective buyers get to see it. And a £500 contribution towards advertising should be more than enough to cover advertising costs for at least the first 12 months.
If it's not entirely clear what you're paying for then perhaps you ought not to be paying it!
Some Brokers want an upfront fee "to show you are commited to selling your business". Errr, really?!? You want to pay big bucks to show YOUR commitment?!? In the cold light of day, away from the super-salesman speak, it doesn't make sense, does it? But you'd be surprised by how many people fall for it...err, I mean, show their commitment in this way.
Is the broker asking for a withdrawal fee?
Well, if you didn't pay an amount for advertising at the beginning of the contract then it's probably fair that you might need to contribute to advertising costs when you terminate the contract. Consider what those costs might have been during the period of the contract though - is the withdrawal fee extravagant compared to what the broker actually paid in advertising costs.
Most medium sized brokers with at least 100 businesses on their books will be paying a few pounds per month to advertise on the Daltons Weekly and the same again on businessesforsale.com. If they have their own website then they have the costs in running that too. And, obviously, there will be costs in managing your account internally. Most Brokers don't advertise in printed media anymore - there's not many people who don't use the internet these days.
When does the broker get paid?
Here's the deal, in my view at least. The broker should be paid if they find you a buyer and the business is sold. Not hard to understand is it?
So, if you use more than one agent (which, as they all advertise in the same places would, in my view, be a waste of effort) then you might expect to pay a bigger commission to the 'winning' agent.
If you're on a 'sole selling' agreement then you can only use one agent.
What does the contract says will happen if you sell the business yourself, close it, or decide not to sell?
Well your broker has spent all that money advertising your business, it's only fair that he should be re-imbursed. So pay him for his advertising.
No, not the £22,000 he's claiming in 'lost opportunity'....just the advertising costs.
In summary, aim for the following contract
1. Pay an upfront fee if it is for advertising. Make sure it says in the contract that it is for advertising - if you're not sure that it does then get the agent to write it on the contract and both of you initial it. Aim for no more than £500.
2. Pay a withdrawal fee if you didn't pay an upfront fee, and certainly not more than £500 for each year you've been with your broker.
3. Pay commission ~ when the business sells ~ to the broker who found the buyer.
If the business closes, you decide not to sell, you sell to a buyer that the broker didn't find ~ expect to pay for any advertising the broker did.
And, most importantly, if you agree terms with your broker or your broker tells you what they are going to do, make sure that's what it says in the contract. If it's a boring and long contract then make a few notes on the back of the contract, sign and date it and get your broker to do the same. Write PTO on the front of the contract.
If your broker won't do this.....start to wonder why.....
So what should you do?
Many Business Brokers are members of the Federation of Business Brokers. Take a look at the FBB website for details of their members.
Also, try the Business Transfer Agents website.
Is the broker asking for an upfront fee?
If the Broker wants an upfront fee, ask what it's for.
If it's an advance payment for advertising, well that's fair enough, isn't it? The quicker your business goes on the market then the more prodpective buyers get to see it. And a £500 contribution towards advertising should be more than enough to cover advertising costs for at least the first 12 months.
If it's not entirely clear what you're paying for then perhaps you ought not to be paying it!
Some Brokers want an upfront fee "to show you are commited to selling your business". Errr, really?!? You want to pay big bucks to show YOUR commitment?!? In the cold light of day, away from the super-salesman speak, it doesn't make sense, does it? But you'd be surprised by how many people fall for it...err, I mean, show their commitment in this way.
Is the broker asking for a withdrawal fee?
Well, if you didn't pay an amount for advertising at the beginning of the contract then it's probably fair that you might need to contribute to advertising costs when you terminate the contract. Consider what those costs might have been during the period of the contract though - is the withdrawal fee extravagant compared to what the broker actually paid in advertising costs.
Most medium sized brokers with at least 100 businesses on their books will be paying a few pounds per month to advertise on the Daltons Weekly and the same again on businessesforsale.com. If they have their own website then they have the costs in running that too. And, obviously, there will be costs in managing your account internally. Most Brokers don't advertise in printed media anymore - there's not many people who don't use the internet these days.
When does the broker get paid?
Here's the deal, in my view at least. The broker should be paid if they find you a buyer and the business is sold. Not hard to understand is it?
So, if you use more than one agent (which, as they all advertise in the same places would, in my view, be a waste of effort) then you might expect to pay a bigger commission to the 'winning' agent.
If you're on a 'sole selling' agreement then you can only use one agent.
What does the contract says will happen if you sell the business yourself, close it, or decide not to sell?
Well your broker has spent all that money advertising your business, it's only fair that he should be re-imbursed. So pay him for his advertising.
No, not the £22,000 he's claiming in 'lost opportunity'....just the advertising costs.
In summary, aim for the following contract
1. Pay an upfront fee if it is for advertising. Make sure it says in the contract that it is for advertising - if you're not sure that it does then get the agent to write it on the contract and both of you initial it. Aim for no more than £500.
2. Pay a withdrawal fee if you didn't pay an upfront fee, and certainly not more than £500 for each year you've been with your broker.
3. Pay commission ~ when the business sells ~ to the broker who found the buyer.
If the business closes, you decide not to sell, you sell to a buyer that the broker didn't find ~ expect to pay for any advertising the broker did.
And, most importantly, if you agree terms with your broker or your broker tells you what they are going to do, make sure that's what it says in the contract. If it's a boring and long contract then make a few notes on the back of the contract, sign and date it and get your broker to do the same. Write PTO on the front of the contract.
If your broker won't do this.....start to wonder why.....
Thursday, 19 January 2012
Who are Totally Web Wise
A few people have asked who Totally Web Wise are as they seem to pop up a few times where RTA are concerned.
The author found this, posted on the What Consumer forums:-
"I am the aforesaid Ceri Edwards and yes I am also a director of Totallywebwise the web design and build business based in Swansea.
Here however is where I must take issue with your advice. Totallywebwise has NEVER had a client other than RTA, so has NEVER asked or demanded any money from ANYONE AT ALL. TWW only works for RTA, as it was set up to provide IT and web solutionms for that company alone.
You say a 'friend' has had dealings with TWW, who have demanded money. OK, get this friend to call me, and if TWW has demanded money from him or her, I will appologise in public and cancel the debt.
Over to you."
The comment was in response to an entry by poster sandyshoes ~ you can see the full link here
What we find interesting is that RTA claim to market our businesses on many websites and yet only one of the ones they use (according to small claims evidence provided to date) isn't actually owned by them in one way or the other.
So here's what we found that Totally Web Wise currently have registered:-
www.myownbusiness.co.uk
www.businessesinlondon.net
www.londonbusinessforsale.co.uk
www.londonbusinessforsale.net
www.qualityhotelsales.com
www.countryhotelsales.com
www.rtaracing.com
www.rta-bosnia.com
www.rta-japan.com
www.jointventurefinance.info
www.rtabusinessesforsale.com
www.rtabusinessesforsale.net
www.rta-online.co.uk
www.rta-america.biz
www.rta-america.com
www.rta-romania.com
www.rtacomplaints.org
www.rtacomplaints.com
www.millionairefortheday.info
www.goneforaburton.org
www.rtadigital.org
www.rtadigital.net
www.rta-admin.com
www.rta-paraguay.com
www.businessforsaleonvideo.com
www.rta-ukraine.com
www.rta-alaska.com
Wow - certainly looks like RTA are set on world domination!
The author found this, posted on the What Consumer forums:-
"I am the aforesaid Ceri Edwards and yes I am also a director of Totallywebwise the web design and build business based in Swansea.
Here however is where I must take issue with your advice. Totallywebwise has NEVER had a client other than RTA, so has NEVER asked or demanded any money from ANYONE AT ALL. TWW only works for RTA, as it was set up to provide IT and web solutionms for that company alone.
You say a 'friend' has had dealings with TWW, who have demanded money. OK, get this friend to call me, and if TWW has demanded money from him or her, I will appologise in public and cancel the debt.
Over to you."
The comment was in response to an entry by poster sandyshoes ~ you can see the full link here
What we find interesting is that RTA claim to market our businesses on many websites and yet only one of the ones they use (according to small claims evidence provided to date) isn't actually owned by them in one way or the other.
So here's what we found that Totally Web Wise currently have registered:-
www.myownbusiness.co.uk
www.businessesinlondon.net
www.londonbusinessforsale.co.uk
www.londonbusinessforsale.net
www.qualityhotelsales.com
www.countryhotelsales.com
www.rtaracing.com
www.rta-bosnia.com
www.rta-japan.com
www.jointventurefinance.info
www.rtabusinessesforsale.com
www.rtabusinessesforsale.net
www.rta-online.co.uk
www.rta-america.biz
www.rta-america.com
www.rta-romania.com
www.rtacomplaints.org
www.rtacomplaints.com
www.millionairefortheday.info
www.goneforaburton.org
www.rtadigital.org
www.rtadigital.net
www.rta-admin.com
www.rta-paraguay.com
www.businessforsaleonvideo.com
www.rta-ukraine.com
www.rta-alaska.com
Wow - certainly looks like RTA are set on world domination!
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