Investment Gone Wrong

BijouDrains

I invested £25000 in a relative’s property business 3 years ago. I was told I would get the money back, plus £5000 interest within 6 months. 3 years on, all I have had is £5000. No contract was drawn up. (Yes I know, I know!). The money was to be used to renovate properties, and then borrow on the equity. Suddenly the banks and building societies stopped lending, which is why I have not received my money back. He owns 15 properties, all rented out, which haven't got a massive amount of combined equity. He has had several on the market for the past year or so, but none have managed to sell.
What I would like to know is: As I have invested £25,000 in these properties, is there a legal route I could go down whereby I could draw up some kind of contract/agreement to tie me in with some of the properties he owns? This would need to be enforced, as my relative has been ignoring the majority of my correspondence over the last 2 years.

[Deleted User]

you could try and persuade him to put a 2nd charge on some of the properties in your name,then when (if)they sell you can have the amount of the 2nd charge paid direct to you

BijouDrains

That sounds interesting. How would I go about doing that? Through a solicitor?

rikki-nut

BijouDrains wrote: »

I invested £25000 in a relative’s property business 3 years ago. I was told I would get the money back, plus £5000 interest within 6 months. 3 years on, all I have had is £5000. No contract was drawn up. (Yes I know, I know!). The money was to be used to renovate properties, and then borrow on the equity. Suddenly the banks and building societies stopped lending, which is why I have not received my money back. He owns 15 properties, all rented out, which haven't got a massive amount of combined equity. He has had several on the market for the past year or so, but none have managed to sell.
What I would like to know is: As I have invested £25,000 in these properties, is there a legal route I could go down whereby I could draw up some kind of contract/agreement to tie me in with some of the properties he owns? This would need to be enforced, as my relative has been ignoring the majority of my correspondence over the last 2 years.

Not sure about the legal route, but I suspect it would be highly unlikely to draw up any kind of contract in retrospect.

Could you not propose that your relative sells one of the properties more competitively to release your cash; ie. reduce the price by at least 35% and it should sell. Yes, your relative will have to take the hit, but they'll still have 14 properties remaining in their portfolio. And more importantly, this gesture would probaly go some way to restoring relations.

Other than that, I don't see any other route out. You will probably just have to take the hit and put it down to experience. Long term, the property market is screwed anyway, and prices will continue to plummet downwards for years to come from this point forward. Many 'buy-to-let' scumlords in it to make a quick buck are about to get burned big time.;)

So overall, take the hit on the chin and don't look back. It's all you can do.

[Deleted User]

BijouDrains wrote: »

That sounds interesting. How would I go about doing that? Through a solicitor?

yes you would need legal advice and of course co-operation from whoever you lent the money to,it would ensure that when one of the properties you had a second charge on was sold you would get the agreed amount paid directly to you.
Complicated I know but might be the only option