Property firm failure leaves amateur investors out of pocket

Property firm failure leaves amateur investors out of pocket



798_2022-05-03-11-01-31am.gif
.

Nearly 300 angry investors are at risk of losing of hundreds of thousands of pounds following the liquidation of a Sussex-based buy-to-let club.

According to a report in the Guardian newspaper, Passive Investments helped amateur property investors purchase buy-to-let properties by selling “portfolio builder contracts” for up to £60,000.

 

This money would be used to buy the properties, with the company handling the renting and managing side of the investment. Investors were also asked to make a periodic payment of anything up to £7,000 to cover extras, such as legal fees.

 

However, founders of Passive Investments wrote to investors last month to announce that the company was going into voluntary liquidation.

 

Clients would have to manage their existing properties alone, whilst the buying of further properties would be ceased – despite investors already parting with their cash.

 

It is thought that over 280 investors have been affected, with many believing that their funds have been misused. According to one of the firm’s clients, up to £2 million is unaccounted for.  

 

Many clients have said that after forking out tens of thousands of pounds and being promised up to ten properties, they have been left with just one or two – and these are of “sub-standard quality”.

 

One said: “There may have been a few investors who received three properties over the years, but no more that I am aware of. I am also aware of several who received none at all.”

 

Passive Investments founder, Greg Ballard, has blamed the demise of the company on the banks’ unwillingness to lend, adding that clients’ money was used for “the running of the business”.

Leave a comment