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Hi all, I am starting this thread as my first investment Rent to Rent deal has ended in a complete disaster, and I have lost £35-40k so far and there is no sign of Investment company agreeing to refund my investment funds.The investment company which I trusted initially sold me 2 x apartment rent to rent deals which should not have been sold by Anand the sales man in the investment company, after I spotted and AD on right move.co.uk and I have evidence of this AD, it turned out that 251 Southwark Bridge Road building where two serviced apartments are located does not allow short lets on Airbnb and booking.com etc.
It turned out that the 251 building head lease does not allow serviced apartments to be used as business to make money. The apartments are purely for residential use only. So I am going to add a list of things to watch out for:
- Never sign any agreement without checking with solicitor about the lease of the property
- Never pay any money upfront (this is what these bastards did asked to pay and reserve apartments as they are going fast, I have emails and phone conversations of it)
- Do a lot of research about the company and the directors involved and if it seems dodgy chances are it is going to be dodgy
- Do not trust anyone and trust your judgement and make sure get the investment company to give you in writing that the shortcut platforms like hotels and booking websites and airbnb listing of that property is legally allowed
- In my case the investment company agreement just says "Short lets allowed" which is vague and not clear
- The investment company had no power to even sign this agreement so I have reported it as a fraud already
- In this case the entire company knew about head lease and never mentioned airbnb and online booking platforms in any agreements or emails and they only agreed it on the phone but I have phone conversations
- They tried to hide from investors what really the deal is and it turned out the investment deal is illegal...
- There are other investors in 251 Southwark Bridge Road building who are victim of this fraudulent deal
- If you are investor and caught up in this type of illegal deal, seek advise and do not pay rent as the agreement is likely to be void and fraudulent anyway. Seek legal help.
- I have given 14 days to investment company to return my money otherwise I will use legal system to recover my funds
Hi Balinder,Thank you for starting this thread and sharing your hard-earned lessons for the benefit of others. Can you explain how you found out that short lets activity was not allowed at that block?Also, London has the "90" day rule, which means this activity can not be undertaken for more than 90 days in one year (without planning permission), which would severely curtail the possibility of creating a profitable business.These are the threads we have on this topic of R2R SA deals where investors have lost money:Jason Cunningham-Source Investments/Quay AccoLee Pemberton - ServicedLets - opinions?And the company that you had your bad experience with:Golden Property - Rent to Rent deals? Further reading:Air B n B/serviced accommodation - reality? Serviced Accommodation / Airbnb - legally? 90 days rule for short term lets
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Would it be possible to know the name of this company so we can steer clear?
After court case is over it will be public information and I will share as much information as I can.
As mentioned above by Vanessa. But the court proceedings are under way so it will all be public information soon.
I went to the apartments to check the progress "by chance" as I was expecting ROI and the building manager emailed me saying the head lease does not allow shortlets and it is London wide rule.Normally investors would not go to the property you see.That's why everyone from the after sales in this investment company and the estate agents involved tried to stop me from going there at the properties. Now it is clear. They even said someone from landlords company wants to meet me but I know the landlords names and it was all lies.Then my legal guys found out the copy of the head lease which clearly stated that short lets on booking platforms and airbnb are not allowed.AlsoI have read in the head lease that these apartments were only for residential use. I terminated my contract immediately I was not even aware of I was being involved in this illegal activity.All I want is my money back but obviously I have not got any confirmation from the investment company that they are going to return my funds. So court case hearing is due soon and see what happens.I have evidence and my solicitors will represent it in front of the court. I hope this topic will save other investors who can make informed decision before investing in rent to rent deals.
The two idiots one of the sales guy and other one the consultant who showed me the apartments both left the company in question after informed about the legal email building management sent me. I informed them it is illegal to let these apartments on airbnb and booking.com etc how can you sell this deal to me? They kept messing around and I kept asking for proof. Anyway now I have evidence from building itself and it is with Action Fraud investigation team. All their staff knew about the head lease legal issues and still took my money and I know other investors were in tears in that building but they kept taking money and mis-sold the investment deal. This deal is not fit for the purpose it is sold for (Scumbags) I have given statement to the police , emails, names of people involved.
I knew all this and uncovered quickly because they were very uncomfortable sending anything in writing, reports about calendar filling up with bookings from airbnb and booking.com Also they gave up too many clues. Also I work for https://www.ft.com which is why they were not ready do give anything in writing and they were investigating my personal life asking questions about is there issue with your housing needs blah blah...clearly shitting their pants as blaming back. I have not committed fraud they have...but they try top put pressure as if they have not done anything. I have telephone recording of the sales guy explaining how their investment plan would work. All estate agents nearby building know about their illegal dealings, so If the legal system does not take them down then media will I bet.
So if you are reading it save your money from such a loss in rent to rent deal. DO NOT GIVE YOUR MONEY!!! Or go to solicitor first so you don't have to go afterwards like me.
I wish I would have Donated my money to a charity or hospital instead. There is always next time!
I feel for you as there are many sharks around touting apartments for R2SA in this illegal way, doing your own due diligence is key.
How did you part with such a large amount of money - what happened?
I have given this company time to return my funds but as they are ignoring me I am going to the court. It is my money and I will do my utmost to recover it and trust legal systems would be able to see the evidence clearly. I have other investors and relevant people supporting me who will be able to go to court and provide evidence too.
Yes I made a loss of over 3k on a R2R agreement sold to me by buy-low-rent-high. They said to me it was a viable HMO but local agents told me it was in the wrong area and I was unable to get anyone for 2 months. I was lucky there was a 6 month notice to terminate the agreement as the agreement itself, which solicitors confirmed, was a standalone agreement and did not make any promises that it was a viable HMO or that the agreement was void if it was not. The landlord was inflexible and did not want to end the agreement and I had to rent it as a residential to minimise my losses.
Lesson learned: always have the agreement reviewed by a solicitor and amended to protect you otherwise walk away.
100% have agreement agreed by solicitor.