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Fraud by developer against a new build

24

Comments

  • mamz001
    mamz001 Posts: 16 Forumite
    AdrianC wrote: »
    This is the 21st century. People can be found beyond these shores.

    I hope so, at first I felt like an idiot because usually I am very careful with all this but having met the other victims, some are doctors and some hold senior posts in financial institutions, so it was very cleverly planned out.
  • DumbMuscle
    DumbMuscle Posts: 244 Forumite
    The "money laundering" is a red herring - basically, the person at the solicitors' office who deals with compliance checks (including money laundering, hence the job title) got passed the buck for this (not unreasonably, as it will be closer to their work than to the work conveyancers normally do), and so was the one to contact you.

    It sounds like there are an awful lot of questions which your lawyer should be asking all the solicitors involved. Most notably, why was any money exchanged at any point in this before they had confirmed that the seller owned the land (or why did those confirmations fail)?

    Going full paranoia for a moment (probably not an issue, but worth checking) - did you find your own solicitor or were they recommended as part of the buying process? Similarly, where did the information about Harry come from? Check that both are registered with the appropriate regulators, and ensure that the contact details you have match the ones publicly available via those regulators if possible. Do as much verification as you can on any other party involved here, especially ones that you might end up owing or paying money to. It's quite possible that you will now end up on a "suckers list" and be targeted for further fraud.

    Has a police report been filed?

    Good luck, I suspect you will need it!
  • eddddy
    eddddy Posts: 16,292
    First Anniversary First Post Name Dropper
    Forumite
    edited 14 June 2017 at 12:56PM
    Are you sure this isn't just a dodgy 'off plan investment scheme'?

    It sounds very much like one, but that doesn't seem to correlate with what your solicitor is telling you. Did the contracts you signed talk about an 'Investment'?


    The way some of these (very dodgy) schemes work is...
    • A developer identifies a site (and perhaps gets an option to buy it)
    • 'Investors' each pay a chunk of money to the developer (i.e. your 40%/60% deposit)
    • The developer uses the money to buy the site, and start building
    • 'Investors' might be required to pay more chunks of money along the way to fund the building.
    • Each 'Investor' gets an apartment at the end (hopefully!)

    Even if no fraud is involved, these unregulated investment schemes can fail catastrophically.

    Sometimes the 'developer' running the scheme is a bloke who was selling used-cars the day before, with no assets, no experience of property development and no business acumen (and no morals).


    Edit to add...

    Having just read DumbMuscle's post - I would agree - check that your solicitor and Harry really are legitimate. They seem to be telling you rather strange things.
  • aneary
    aneary Posts: 921 Forumite
    I would look at your solicitor it looks like they have failed in a number of areas and as they are about with insurance you have a better chance of getting some money back.
  • jbainbridge
    jbainbridge Posts: 2,014
    First Anniversary Name Dropper Combo Breaker First Post
    Forumite
    Could someone clarify at what point money should be released to the vendor? My understanding was it happens at completion ... I guess I'm wrong?
  • mamz001
    mamz001 Posts: 16 Forumite
    DumbMuscle wrote: »
    The "money laundering" is a red herring - basically, the person at the solicitors' office who deals with compliance checks (including money laundering, hence the job title) got passed the buck for this (not unreasonably, as it will be closer to their work than to the work conveyancers normally do), and so was the one to contact you.

    It sounds like there are an awful lot of questions which your lawyer should be asking all the solicitors involved. Most notably, why was any money exchanged at any point in this before they had confirmed that the seller owned the land (or why did those confirmations fail)?

    Going full paranoia for a moment (probably not an issue, but worth checking) - did you find your own solicitor or were they recommended as part of the buying process? Similarly, where did the information about Harry come from? Check that both are registered with the appropriate regulators, and ensure that the contact details you have match the ones publicly available via those regulators if possible. Do as much verification as you can on any other party involved here, especially ones that you might end up owing or paying money to. It's quite possible that you will now end up on a "suckers list" and be targeted for further fraud.

    Has a police report been filed?

    Good luck, I suspect you will need it!

    You're right the letter says a victim of fraud. You're spot on Harry my litigation solicitor told me, the land registry should have been checked by my conveyancing solicitor before any money exchanged, so they clearly didn't do all the relevant checks. The conveyancing solicitor was actually recommended by the managing agent, all 10 of us victims had the same solicitor, we only found out about this after we were all victims.

    I spoke to the police and they got me to file a report with Action fraud which I have. One of the victim's friend recommended Harry, I was the same as you and paranoid so checked him out on the SRA website, linkedinn google etc. He seems legit so we went with him. I also visited Harry at his office in person to ensure he was a real person with a real office.

    Harry has been on the case and updating us daily with the communication he has been doing with my conveyancing solicitors and also the developer's solicitors.

    Finally thank you for the luck.
  • eddddy
    eddddy Posts: 16,292
    First Anniversary First Post Name Dropper
    Forumite
    Could someone clarify at what point money should be released to the vendor? My understanding was it happens at completion ... I guess I'm wrong?

    The contract that about 99.9% of home buyers in this country use says that the money is transferred to the vendor on completion.

    But a contract can anything you like... it could say the money is transferred 6 months in advance of completion or 10 years after completion. As long as both parties agree.
  • mamz001
    mamz001 Posts: 16 Forumite
    eddddy wrote: »
    Are you sure this isn't just a dodgy 'off plan investment scheme'?

    It sounds very much like one, but that doesn't seem to correlate with what your solicitor is telling you. Did the contracts you signed talk about an 'Investment'?


    The way some of these (very dodgy) schemes work is...
    • A developer identifies a site (and perhaps gets an option to buy it)
    • 'Investors' each pay a chunk of money to the developer (i.e. your 40%/60% deposit)
    • The developer uses the money to buy the site, and start building
    • 'Investors' might be required to pay more chunks of money along the way to fund the building.
    • Each 'Investor' gets an apartment at the end (hopefully!)

    Even if no fraud is involved, these unregulated investment schemes can fail catastrophically.

    Sometimes the 'developer' running the scheme is a bloke who was selling used-cars the day before, with no assets, no experience of property development and no business acumen (and no morals).


    Edit to add...

    Having just read DumbMuscle's post - I would agree - check that your solicitor and Harry really are legitimate. They seem to be telling you rather strange things.

    The developer never ended up buying the site at all, the managing agent said it has been brought but the system hadn't been updated yet, I have all this in an email. Plan was for me to move in there, but I suspect the developer had the plan from the very beginning to make some money and leg it.
  • mamz001
    mamz001 Posts: 16 Forumite
    That's what my litigation solicitor has proposed but he wants to mitigate losses first by freezing the developer's bank accounts etc, it seems like the right thing to do but quite costly.
  • Guest101
    Guest101 Posts: 15,764 Forumite
    Could someone clarify at what point money should be released to the vendor? My understanding was it happens at completion ... I guess I'm wrong?
    Not ways, but typically.


    This is slightly different as they're buying off-plan and so exchange early on - usually to secure the property at a cheaper rate.
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