Monthly Home Draw Rules

1. DRAW AUTHORITY AND PURPOSE

1.1 Operating Authority

This home draw is operated by Profit Free Homes Community Interest Company (the “Community”), a Community Interest Company registered in England (Company Number: 12340762).

1.2 Purpose

The draw is conducted for the benefit of Community members to further the Community’s objectives of providing access to affordable homes for first-time buyers who would otherwise be excluded from the housing market.

1.3 Non-Commercial Operation

This draw is operated on a not-for-profit basis. No proceeds will be used for private gain or commercial profit. All surplus funds support the Community’s ongoing affordable housing initiatives.

2. MEMBERSHIP AND ELIGIBILITY

2.1 Membership Requirement

An active Membership is required both at the time of purchase and the home draw itself. Entries can only be accepted with an active Membership ID as part of the entry. Entries without an active Membership ID cannot be processed and will not be part of the monthly draw.

2.2 Geographic Restriction

Membership and draw participation for the current home draw is restricted to Members who wish to be residents of Birmingham, Manchester, and Newcastle in the United Kingdom. Homes in other geographic areas may be part of future draws but no alternative to the cities will be offered as part of the current draw.

2.3 Age Requirement

All Members must be 18 years or older at the time of ticket purchase.

2.4 Nominated Prize Recipients

A Member can become a Member on behalf of a dependant or loved one who is under the age of 18. Such Members must complete the Nominated Prize Recipient Form available in the Members area of the Members app before a home draw so that their Nominated Prize Recipient is legally entitled to the home in the event of winning the draw subject to the following:

• No individual can own a home in the UK under the age of 18 so any Nominated Prize Recipient under that age who wins a home draw will have their home ownership deferred until they reach 18.
• The Member must keep their Membership active during this deferment period and can chose to either pay:

1. their monthly Membership fee; or
2. the minimum monthly repayment amount on the home; or
3. any amount in between or above these amounts.

• All payments made during the deferment period will be deducted from the home repayment balance.

2.5 Verification Requirements

As the draw is for a home, active Membership requires Members to have provided the following valid Know Your Customer (KYC) information before they can claim a home that has been won in the draw:

• Proof of identity (passport or driving licence)
• Proof of billing address (utility bills or bank statements from past 12 months)
• Bank details for the monthly Direct Debit that will be used to pay down the balance on the home
• Declaration of first-time buyer status

2.6 First-Time Buyer Status

Members (or their Nominated Prize Recipient) must be first-time buyers as defined by HMRC regulations. This means they must not:

• Currently own a residential property
• Have previously owned a residential property
• Have inherited a residential property valued over £5,000

2.7 Affordability Criteria

In the event of winning a home draw the Member will be able to move into the home once they have completed the relevant legal documentation. The Member will then begin monthly payments to repay the balance remaining on the home as follows:

• The monthly repayment will be set at approximately 80% of the local market rental rate for a similar property (this is the Minimum Monthly Repayment Contribution)
• There will be no interest or other fees payable for the home and once it is paid off in full you will legally own the property in its entirety
• Evidence of ability to meet these monthly repayments will be required before you can move into your home. This evidence will be gathered by the Community as part of your active Membership on an ongoing basis and can include but is not limited to:

1. proof of paying a similar or higher amount for the rental of any property in the UK for 6 months in the previous calendar year; or
2. proof of having / saving a similar level of disposable income from your wage slips and bank statements for 6 months in the previous calendar year; or
3. credit scoring and open banking apps that the Community will make available to you as part of your active Membership so you can monitor and report your own affordability criteria on winning a home draw.

• You agree in full to provide such information as is required to meet the affordability criteria
• If you are not able to meet the affordability criteria immediately you can defer the award of your home until such time as you do. You will not have to win another home draw to access a home and can move into your allocated home as soon as you meet the affordability criteria
• A very important part of the Community’s purpose is to help Members become home owners. The Community will work with and support you at all times to achieve the affordability criteria and then, in turn, your repayments. The Community will provide you with useful tools and options to make both affordability and repayment a reality for you as a Member of the Community
• Once you have paid for the home in full it is 100% yours. Until that point, the Community will retain the right to offer the home to another Member in the event of a Serious Default of your repayment obligations.
• The Community will assist all Members who appear to be at risk of Serious Default and, again, have specialist tools to help Members who enter a period of financial difficulty. If the Member is unable or unwilling to resolve a period of underpayment for more than 6 months this will be considered a Serious Default.

2.8 Joint Membership

Members are allowed and encouraged to create Joint Memberships when they are part of a couple or group looking to own a home together. Each individual should create their own Membership and then use the Joint Membership Form available in the Members area of the Members app to link their Memberships. This will:

• Pool the Members monthly home draw entries
• If any of the Joint Members win the draw all Joint Members are awarded the home
• The home will be repaid subject to the standard conditions above with the contribution paid by each Member recorded in the Member app
• If, before the award of a home, any participant in a Joint Membership choses to leave the group they can separate their Membership and continue to enter home draws as an individual
• If, after the award of a home, any participant in a Joint Membership choses to leave the group they can separate their Membership and will be entitled to full repayment of their contribution from the remaining Joint Membership participants or individual staying in the home. Alternatively, the leaving Member can choose to recommence participation in the monthly home draws and allocate their contributions to another home awarded under that process.

2.9 Home Sales

The purpose of the Community is to help people become home owners despite the challenges of the UK housing market. The Community is not here to help people make a fast buck from home ownership by avoiding the interest rates payable on a typical mortgage. That said, the goal is to help Members own and benefit from an important asset in their lives that provides both a home and financial security to Members. To this end, there are no complicated rules on selling the home, there is just a straightforward set of principles:

• Once awarded, no home can be sold until 50% of the home value at the point it was awarded has repaid; and
• Any uplift in the value of the home from a sale will be split between the Member/s and the Community on the following basis:

1. If 50-59.9% of the award value has been repaid then any uplift will be split 50% to the Member and 50% to the Community;
2. If 60-69.9% of the award value has been repaid then any uplift will be split 60% to the Member and 40% to the Community
3. If 70-79.9% of the award value has been repaid then any uplift will be split 70% to the Member and 30% to the Community
4. If 80-89.9% of the award value has been repaid then any uplift will be split 80% to the Member and 20% to the Community
5. If 90-99.9% of the award value has been repaid then any uplift will be split 90% to the Member and 10% to the Community.

3. DRAW OPERATION

3.1 Draw Schedule

Monthly draws conducted on the last Friday of each month at 12:00 noon.

3.2 Ticket Sales Period

• Sales open: Immediately after the completion of the previous draw
• Sales close: One (1) hour before each end of month draw
• No late entries accepted under any circumstances

3.3 Ticket Purchase

• Price: £0.50 per ticket
• Members may purchase unlimited tickets
• Each ticket represents one entry into the draw
• All tickets have equal chance of winning
• Tickets non-refundable except in cases of draw cancellation

3.4 Purchase Methods

• Online through secure member portal
• Direct debit for regular monthly entries
• Bank transfer with unique reference number
• No cash sales permitted

3.5 Postal Entry

• To enter for free send an unenclosed postcard by first or second class post stating your: Full Name, Contact Email Address and Phone Number, Full Address, Month of Entry and active Membership ID to Profit Free Homes
• Only one entry per postcard
• No bulk entries are allowed and will only be treated as a single entry
• No commercial entries are allowed
• All postal entries must be received before the close of the requested home draw
• Entries submitted without a valid Membership ID cannot be processed
• Incomplete or illegible entries will be disqualified
• If your entries do not comply with the terms they will not be included in the draw
• Valid postal entries will be added to your online Member account once processed and can be viewed in the Member app

4. PRIZES

4.1 Prize Structure

• One residential property per monthly draw
• Average property value: £150,000 (exact value varies by property)
• Properties are located within the three designated cities
• Properties are selected for suitability for first-time buyers

4.2 Community Obligations

The Community will pay all standard costs associated with property transfer including:

• All conveyancing and legal fees
• Property surveys and searches
• Stamp Duty Land Tax (where applicable)
• Land Registry fees
• Buildings insurance up to completion date

4.3 Winner’s Obligations

The winner is responsible for:

• Buildings and contents insurance from completion date
• Council tax from completion date
• Utility connections and accounts
• Payment of the Minimum Monthly Repayment Contribution until the home has been paid for in full
• Ongoing property maintenance

5. DRAW PROCEDURES

5.1 Draw Method

Electronic random number generation using certified software, ensuring complete randomness and fairness.

5.2 Draw Supervision

All draws witnessed by:

• Minimum two Community Directors
• One independent witness (not a Community member)
• Community’s appointed auditor or representative

5.3 Draw Streaming

• Live stream and recording of the draw process
• Written record signed by all witnesses
• Results logged in secure database
• Records retained for 7 years

5.4 Winner Selection

• First number drawn is awarded the home
• Further numbers will be drawn but not published to allow for any deferment by the winner
• Any deferment by the winner will result in the second number drawn being named the winner and their result will be published along with the supervision confirmation and witness statements
• Any deferment by the second winner will result in the third number drawn being named the winner and their result will be published along with the supervision confirmation and witness statements
• This process repeats until a winner is named
• Any winner who does defer does not need to win a future draw. They will be entitled to claim a home from a future draw when their deferment period has come to an end.

6. WINNER NOTIFICATION AND PUBLICITY

6.1 Notification Process

Winners notified within 12 hours by:

• Telephone (minimum 3 attempts)
• Email to registered address
• Notification in the Member app
• Registered post to home address

6.2 Member Communication

• Results will be posted in secure member area within 2 hours (subject to deferrals)
• Winner’s first name and city published (unless opted out)
• Full results available to all Members on request

7. CLAIMING PRIZES

7.1 Claim Period

Winners have 90 days from the notification date to claim their home. Failure to claim within this period results in prize reverting to Community.

7.2 Property Transfer

Completion targeted within 90 days of claim

• Community’s appointed solicitors manage process
• Winner may appoint own solicitor at own cost
• Any delays beyond Community control may extend timeline

8. FINANCIAL MANAGEMENT

8.1 Proceeds Allocation

All draw proceeds allocated as follows:

• Property fund: 80% of proceeds
• Administration costs: Maximum 20% of proceeds

8.2 Financial Controls

• Monthly reconciliation of all transactions
• Quarterly management accounts
• Annual independent audit

8.3 Transparency

• Annual draw report to members
• Summary of properties awarded
• Financial overview provided
• Available at AGM and on request

9. MEMBER RIGHTS AND RESPONSIBILITIES

9.1 Equal Treatment

All eligible Members have equal right to participate regardless of:

• Length of Membership
• Number of previous entries
• Geographic location subject to future residency criteria

9.2 Data Protection

• All personal data processed under GDPR
• Data used only for draw and Membership administration
• No sharing with third parties without specific opt-in for affordability and repayment tools
• Right to data access and deletion

9.3 Responsible Participation

Members must:

• Only spend what they can afford
• Maintain accurate personal information
• Notify Community of eligibility changes

10. COMPLAINTS AND DISPUTES

10.1 Complaints Procedure

• Stage 1: Direct to Draw Administrator
• Stage 2: Appeal to Trustee Board
• Stage 3: Independent adjudication
• All complaints acknowledged within 2 working days

10.2 Dispute Resolution

• Community decision final on operational matters
• Legal disputes subject to English law
• Mediation preferred before litigation
• No impact on statutory rights

11. REGULATORY COMPLIANCE

11.1 Legal Framework

This draw operates as a private Community draw under:

• UK Prize Draw rules
• Community’s constitution and CIC regulations

11.2 Record Keeping

Comprehensive records maintained for 7 years:

• Member verification documents
• Ticket sales records
• Draw videos and documentation
• Financial accounts and reconciliations
• Complaints and resolutions

11.3 Regulatory Returns

The Community will:

• Maintain records for inspection
• Cooperate with any regulatory inquiry
• Include draw activity in annual CIC report

12. SUSPENSION AND TERMINATION

12.1 Suspension Rights

The Community may suspend draw for:

• Unforeseen Operational difficulties
• Force majeure events

12.2 Member Protection

In case of suspension:

• Current month’s tickets refunded in full
• Members notified within 48 hours
• Explanation provided
• Timeline for resolution given

13. AMENDMENTS

13.1 Rule Changes

• 30 days notice of significant changes
• Member consultation for fundamental changes
• Immediate changes only for legal compliance
• Current rules always available to members

13.2 Version Control

• These rules effective from: 4^th March 2025
• Version number: 2.13
• Last updated: 9^th May 2025
• Supersedes all previous versions

 

You’ve read it all, thanks! Want to be part of this? Want your own afforable home without the financial weight of a mortgage? Then…

Become a Member