Speaking to Money Marketing, LSL Property Services chief executive Simon Embley says HoC advisers will be paid all the pipeline commission that is owed to them following the deal last week.
The network will initially trade under the First Complete brand, with existing Home of Choice management. LSL says it may revive the Home of Choice brand at a later stage. LSL will also have representation on the board.
Embley says: “Even though the business technically went into administration and was pre-packed and we have no contractual responsibility to pay back commission, we are paying all the back commission to advisers.”
Embley also says LSL will pay any clawbacks due to product providers.
He says: “If we are going to have a relationship with existing providers, we clearly have got to assume that pipeline commission will be clawed back. All the product provider relationships and mortgage relationships will stay the same. There will be liabilities associated with those and we will honour those as well.”
Embley says Home of Cho-ice’s board was not to blame for the network entering administration, saying that the business was only losing money because it was funded with capital instead of equity.
He says: “This business was only losing money because it had an inappropriate capital structure. It is not the management’s fault that the capital markets have done what they have done.
“Anybody that had a debt funding structure has suffered in this recession. That is why we have backed the management 100 per cent.”