Shocking stories of property investors buying overseas and falling foul of unscrupulous agents, developers, lawyers and even banks are emerging, reinforcing the need for buyers to take property advice before handing over any money…
The dreams of many British investors end up with them being considerably out of pocket, some by up to half a million pounds, according to a company that launched a month ago to help people get their deposits back.
Several hundred property investors have already contacted reclaimyourdeposit.com with tales of how their property dreams have left them considerably out of pocket.
These include estate agents who have taken client funds but never passed them to the developer and then gone missing, developers who have failed to secure licenses, deliver promises or simply gone bust, banks that have mishandled consumer funds in escrow or changed the terms of developers' loans on a whim leaving them financially unstable, and the buyer who hasn't undertaken any due diligence and decided against using a lawyer and is now paying the price of doing so.
Director Daren Wallbank said some of the stories reinforce the reasons why the overseas property industry has such a shocking reputation at times. One investor lost 25,000 paid for an apartment on the Costa del Sol which was lost when the agent, lawyer and developer all went bust. Another paid €42,500 for a townhouse on Costa Cálida that is complete but has no habitation license so the client is rightly stalling on taking title deeds but poor build quality has caused the basement to flood and the agent has said they won't access it until the final sum is paid.
Another buyer paid an Italian lawyer €41,000 for an apartment in Calabria but they have now disappeared without passing the funds to the developer. An investor paid £90,000 paid for an apartment in Dubai which was due for completion in 2009 but the project has barely broken ground yet the developer is asking for a further £90,000 or they'll terminate the contract.
There is a similar story from Cyprus where €44,000 has been paid for an apartment due to complete in 2006 but is still barely built and the developer is insisting on more money despite owing several years' compensation from a clause written into the sales contract.
Wallbank said although there is no magic wand that can be waved to return people's money the company exists to assess individual cases, scrutinize loopholes in purchase contracts and reclaim money on the client's behalf.
‘I have seen exactly how it works from the inside, having been an estate agent and sales director for a now-defunct developer and am now using this knowledge to help purchasers. We believe in solutions which help people draw a line under their nightmares and move on with their life,' he explained.
Typically the company can explore five different avenues to arrive at a solution: legal action against the developer, negotiating with the developer, selling a client's contract to an investor, switching to a completed unit on the same development or switching to a completed unit on different developments. It works on a fee basis, success fee basis or a mixture of the two
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