Developer dissolving company after each project

comeandgo

Usually each development will have its own ltd company so if that development has financial problems then it does not bring all the other companies of that developer down with it.  It is always advised that a neŵ ltd company be started.

eddddy

Ybe said:

user1977 said:

It's pretty commonplace to have one company for each project, nothing inherently suspicious about it. You can check on Companies House why they were dissolved i.e. whether they went into liquidation because they were bankrupt etc, rather than just because they had served their purpose.

Do you care how much of a profit they're making anyway?

No. I just want to know that if I pay my money, I get a fully delivered property. Or if they fail to deliver, I don’t lose anything and get my deposit back. It just says liquidation on companies house. 

That's a different issue. You need to check the terms of the contract.


With a large reputable developer, often, it will be..

• You pay a 10% deposit on exchange of contracts. It's held by the solicitor. If completion doesn't happen (e.g. because the developer has gone bust) the solicitor gives you the 10% back

• You pay the final 90% when the building is complete, and the keys are handed over. So there's no risk of losing that 90%

But...

• Sometimes the developer will want the 10% deposit released to them before completion. In that case, check whether the deposit is insured by the developer. For example, if the property is covered by an NHBC warranty, that includes insurance for your deposit.

But...

• There are also some high-risk off-plan schemes (often called investment schemes) where you pay the developer big chunks of money in advance to finance the build. In my opinion, these are very high-risk, very opaque schemes. And you risk losing a lot of money.

• You need to be a very sophisticated investor to consider these unregulated schemes. (And if you are a sophisticated investor, I think you would look at the details and decide they shouldn't be touched with a barge-pole.)

Ybe

Some of the plots in this development (which is built) don’t have planning permission yet. 

eddddy

Ybe said:

Some of the plots in this development (which is built) don’t have planning permission yet. 

Are you saying that the developer is asking you to pay a deposit for house which isn't built yet, on a plot which doesn't have planning consent yet?

If so, that sounds very much like the high-risk off-plan schemes (often called investment schemes) that I describe - which I would strongly suggest you don't get involved with.


Or are you talking about a well-known, mainstream developer who is building a housing estate - in which case what makes you think they don't have planning consent?

Ybe

eddddy said:

Ybe said:

Some of the plots in this development (which is built) don’t have planning permission yet. 

Are you saying that the developer is asking you to pay a deposit for house which isn't built yet, on a plot which doesn't have planning consent yet?

If so, that sounds very much like the high-risk off-plan schemes (often called investment schemes) that I describe - which I would strongly suggest you don't get involved with.


Or are you talking about a well-known, mainstream developer who is building a housing estate - in which case what makes you think they don't have planning consent?

Or are you talking about a well-known, mainstream developer who is building a housing estate - in which case what makes you think they don't have planning consent?

It is a small independent developer. It is a conversion of an office/warehouse building and so the developer applied for planning permission for change of land use for each plot. Some of the units don’t yet have planning permission. 90% of the build is complete. 

eddddy

Ybe said:

It is a small independent developer. It is a conversion of an office/warehouse building and so the developer applied for planning permission for change of land use for each plot. Some of the units don’t yet have planning permission. 90% of the build is complete. 

You talk about conversion an office/warehouse building (presumably into flats) - so that sounds like a single building.
Then you mention "change of land use for each plot" - without explaining what land or what plots you mean.
And then you use the word "units" - do you mean "flats" (or "buildings" or "plots" or "pieces of land")?

So it's difficult to comment.  It sounds like you're trying to explain low-level details that you don't really understand. Maybe take a big step back, and describe the scheme you're talking about - or maybe provide a link.


From your posts, it's really not clear whether you've stumbled across a dodgy investment scheme that you found on the internet, or whether it's a completely standard development project, and you're confusing yourself.

Ybe

eddddy said:

Ybe said:

It is a small independent developer. It is a conversion of an office/warehouse building and so the developer applied for planning permission for change of land use for each plot. Some of the units don’t yet have planning permission. 90% of the build is complete. 

You talk about conversion an office/warehouse building (presumably into flats) - so that sounds like a single building.
Then you mention "change of land use for each plot" - without explaining what land or what plots you mean.
And then you use the word "units" - do you mean "flats" (or "buildings" or "plots" or "pieces of land")?

So it's difficult to comment.  It sounds like you're trying to explain low-level details that you don't really understand. Maybe take a big step back, and describe the scheme you're talking about - or maybe provide a link.


From your posts, it's really not clear whether you've stumbled across a dodgy investment scheme that you found on the internet, or whether it's a completely standard development project, and you're confusing yourself.

So it’s a scheme converting a single office building into flats. I think it’s a standard development project. Here is a link to the planning permission. It is being marketed on Rightmove. https://publicaccess.barnet.gov.uk/online-applications/simpleSearchResults.do?action=firstPage

Ybe

Link above didn’t work but typing N3 1XE into the Barnet planning portal will bring it up. 

eddddy

So it's this development: https://www.kfh.co.uk/north-london/n3/shakespeare-house/property-for-sale/d2002175/

So they're being sold through a reputable EA - not "Del and Rodney with shiny suits and a nice webpage". The EA will have done some level of due diligence investigating the developer before agreeing to sell the developer's properties.


Back to your original question - ask the EA what selling terms the developer is looking for. For example, is it...

• Exchange of contracts in 28 days with 10% deposit
• Completion on notice

You can also ask the EA if the flats come with a new conversion warranty, and how the deposit will be protected.

For example, there's the NHBC conversion warranty - which protects buyers' deposits.  https://www.nhbc.co.uk/builders/warranties-and-cover/conversion

It's a large reputable EA with a new homes division - so hopefully they'll understand the significance of your question. But either way, you'll need to get your solicitor to check everything.


If you want, you can also ask the EA to ask the developer for the relevant planning application reference numbers - but that might be overkill. Again, your solicitor will ask for that.

user1977

Ybe said:

eddddy said:

Ybe said:

Some of the plots in this development (which is built) don’t have planning permission yet. 

Are you saying that the developer is asking you to pay a deposit for house which isn't built yet, on a plot which doesn't have planning consent yet?

If so, that sounds very much like the high-risk off-plan schemes (often called investment schemes) that I describe - which I would strongly suggest you don't get involved with.


Or are you talking about a well-known, mainstream developer who is building a housing estate - in which case what makes you think they don't have planning consent?

Or are you talking about a well-known, mainstream developer who is building a housing estate - in which case what makes you think they don't have planning consent?

Some of the units don’t yet have planning permission. 

As far as I can make out from the planning history, only one ground floor unit has a pending planning application.