An estate agent involved in the Burnham-on-Sea fee fixing cartel scandal last year has been expelled from the Royal Institute of Chartered Surveyors (RICS) following a panel hearing earlier this month.
Jeremy Bell (pictured, left), who is a partner in the firm Greenslade Taylor Hunt (GTH), is identified by RICS as one of the early organisers of the cartel and whose name was originally redacted within the Competition and Markets Authority (CMA’s) report about the cartel last year.
“However, there is no dispute that the “Senior Employee 1” at GHT is Mr Bell,” the RICS investigation states.
RICS says Bell has agreed to pay the entire £170,000 fine levied by the CMA himself, has been fined £1,000 by PropertyMark and agreed to attend ethics courses.
GTH, together with five other firms, controlled an “overwhelming majority” of the town’s property sales market and Bell and other agents from these firms together colluded to fix fees.
The investigation by RICS, which has concluded by expelling Bell from its ranks, reveals details of the cartel including emails between he and its other organising members.
These included Gary Berryman Estate Agents, Abbott and Frost Estate Agents, Saxons PS and West Coast Property Services.
The emails also reveal details of how competition between agents in the town had pushed fees down to between 1% and 1.25% and that agents within the cartel were desperate to raise them back up to between 1.5% and 1.75%.
RICS also reveals that the cartel members met at Greenslade Taylor Hunt’s offices on Tuesday 3rd December 2013 “to discuss the ongoing fee situation,” Bell outlined in one email.
One agent then contacted Bell to outline how they were “thinking along the same lines”.
Bell replied that “if we can just agree minimum 1.5% across the board, we would have done well”
The agents later discussed how the cartel would be policed to ensure all of them stuck to the agreed fees structure (see below) with each agent taking turns to be “policeman/problem solver”.
“I felt this was a meeting of common minds and went remarkably well [and] I’m confident this will work; everyone has stock and nobody is new to the town wanting to build stock from scratch,” Bell commented in a subsequent email.
“I have a good feeling that as entrepreneurs we can still cooperate to mutual advantage and grow our businesses equally but concentrating on our firms’ unique brands and services and selling ourselves not cutting each other’s throat financially.”
Although Bell – who is in a day-to-day capacity an auction specialist – admitted the cartel activities, in his mitigation statements to RICS he said the meetings were “informal chit chat” and that he had later handed over the reins to his branch manager.
“I do, of course, accept the findings of the [RICS] report, which has been thoroughly compiled. I have no real criticism now that I understand the concept of the law,” he says.
“How on earth I could not have seen the light and drilled down to discover these talks were in breach of the Competition Act, dumbfounds me to this day.”
The panel, which heard evidence from Bell, concluded that he was “deliberately vague” and that he “appeared to have deluded himself into believing his own version of events” and “departed from his own previous oral evidence”.
The RICS panel also examined whether GTH was guilty of not having “in place adequate controls and/or training and/or monitoring procedures to prevent staff entering into anti-competitive agreement(s) or concerted practice(s), contrary to the Firm’s professional obligation to comply with the Competition Act 1998”. The panel found this “not proven”.
Fees the cartel discussed
The RICS investigation reveals the extraordinary fine detail of the fee fixing agreement the agents in Burnham discussed. This included:
Sole Agency: from 1.5% plus VAT with a minimum fee of £1,500 for properties up to £100,000 and £2,000 for properties over £100,000
Multiple or Joint Agency: from 2% plus VAT