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Vendor who hoped to raise £3.75m through house sale raffle ‘bought it cheaply under Right to Buy’

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A home owner who hoped to raise £3.75m by raffling her property reportedly bought it for £360,000 just three years ago under the Right to Buy scheme.

She has now halted the raffle after advice from the local authority, Greenwich Council, that it could breach Gambling Commission rules.

Renu Qadri launched the raffle on May 7, after placing it on the market with online agent YOPA in March. According to Rightmove, the price was reduced at the end of March, and is now £1.25m.

The ex-council property is a flat spread over the top two floors of a house in Blackheath, London.

Qadri, who is believed to have lived in the flat since 2002, set up a website offering tickets for £5 each via Paypal.

She hoped to raise £3.75m, with a ticket picked at random, with some of the money going to charities.

According to a note issued to solicitors by the Law Society, house raffles could be illegal lotteries. Under the Gambling Act 2005, lotteries remain the preserve of good causes and cannot be operated for commercial or private gain.

The note says that generally, lotteries must be licensed by the Gambling Commission.

It warns: “Unregistered lotteries are illegal and any funds received from them will be considered the proceeds of crime.”

The website set up to raffle the flat now has a message on it saying: “Ticket holders, please be advised that unfortunately we have been contacted by the local council informing us we will no longer be able to continue with this draw. Therefore we will be closing the site and all tickets holders will receive a full refund within 28 days.”

According to the Telegraph, the property was valued at £460,000. Under Right to Buy, it was sold at a £100,000 discount for £360,000.

Under the rules of the scheme, Quadri would have to pay back 60% of the original discount as a proportion of the new value if she were to sell in the third year after her purchase.

Were she to sell for £1.25m, she would have to repay £165,000 to Greenwich Council.

Her website had said: “After buying our house we are now struggling to pay the mortgage due to disability, and have tried but failed to sell the property through traditional routes and we would like to avoid repossession.

“After talking to many estate agents and ‘quick buy’ companies, we believe it is in our best interest to take the sale of our property into our own hands, whilst offering someone else the opportunity to own and enjoy the property as their own.”

A spokesperson for Greenwich said: “The Royal Borough welcomes the withdrawal of this raffle after our alerting the resident to possible contravention of the Gambling Act 2005.”

We have covered a number of instances of property owners attempting to raffle their homes – usually with an element of knowledge needed, to satisfy the Gambling Act – but in many years of these stories, we have never reported on a single success.

If anyone knows of an instance where a house was raffled successfully, we would be very interested to hear.

http://www.telegraph.co.uk/personal-banking/mortgages/woman-raffling-london-home-375m-bought-three-years-ago-right/

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Source:: Vendor who hoped to raise £3.75m through house sale raffle ‘bought it cheaply under Right to Buy’