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“Postcode Lottery” couple raffle their £1m Devon estate

As the property market worsens, developers and private sellers find alternative selling techniques to divest of housing stock. Incentives including paid deposits, stamp duty and huge price reductions have so far not been enough to entice potential purchasers and their lenders to part with their cash in the current economic climate. Rebecca Evans, commercial property solicitor, examines one innovative approach to the problem and its legal consequences.

An alternative approach used by the Wilshaw family to sell their family home in Devon when they failed to sell their home using the usual method was to sell raffle tickets at £25.00 each, with the winning ticket holder taking ownership of the property worth approximately £1m.

The raffle for the Wilshaw’s home was halted by the UK Gambling Commission on the day of the prize draw with the commission requiring proof the raffle complied with the Gambling Act 2005.

The complicated rules of The Gambling Act essentially provide that any scheme must pass the necessary "skills-based" test and meet the criteria of a “prize draw”. With this in mind, participants in the Wilshaw’s prize competition must qualify by answering a question: “What is the cost of an adult full season coarse fishing licence for 2008/2009?”
 
Since then, due to the worsening market conditions, more and more developers have looked into the tactic and in the case of MIA Developments utilised this innovative sales strategy to realise cash for housing stock. Warnings have been issued by the UK Gambling Commission that if the “prize draws” do not comply with the Gambling Act, the commission will intervene and prosecute. However, the Gambling Commission further supported the Wilshaw’s case with guidance notes on their website stating that “the Commission does not think that a particular clue or question fails to qualify as involving skill or knowledge just because the answer can be discovered by basic research, whether on the internet or elsewhere”.

 In October of this year UK Gambling Commission chief executive, Tom Kavanagh commented upon the use of the lottery style sales strategy, “lotteries are the preserve of good causes and cannot be operated for private gain,” and “homeowners considering such schemes as an alternative to selling their house risk committing a criminal offence if they cross the boundary and stray into offering an illegal lottery.”

He may not have to worry too much. In the wake of the Wiltshire Family’s, much publicised, attempts to sell their property there has been a rash of similar schemes with none to-date having reported a successful outcome; lack of interest and poor ticket sales being the major reasons. The key to the Wiltshire’s success may prove to be the strong marketing campaign in the British media and massive attention gained following an appearance on national television when the story was first reported due to its novelty. In this case at least, it appears someone is about to acquire a £1million Devon estate for just £25.

Before considering this approach it is imperative legal advice is sought.

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