Investors in the Prosperity development at Bentley Court and Parkwood Court have been invited to join an action to recover their investments. We will provide more detail on the background to the investment on this page and will also write regular blogs to update investors on our investigations into the investments.
If you would like further information on the recovery action please email us via the Contact Page. If you would like to see some of the other cases we are investigating please visit the Safe Or Scam website using this link.
Bentley Court and Parkwood Court
According to documents provided to investors the two tower blocks were sold under a conditional sale agreement between Incommunities Ltd (the owner) and ALB Investments Ltd (the developer). The contract was allegedly signed on 11th December 2015. Incommunities has been contacted several times to provide a copy of the contract but have thus far remained tight-lipped and have chosen not to comment.
On 23rd December 2015 all 192 apartments were allegedly sold by ALB Investments (“ALB”) to PDC Prosperity Management (Cyprus) Ltd (“Prosperity”). This contract was conditional upon staged payments being made by Prosperity over a period of time. ALB was required to refurbish the tower block and the apartments.
Almost immediately Prosperity began promoting the properties to investors at the purchase price + 30% (the “inflated price”).
Prosperity offered investors an innovative finance scheme whereby they could pay their deposits over two years in 24 equal monthly instalments. The deposits were either 30% or 50% of the inflated price. The balance was to be paid from a rental guarantee scheme (the “Scheme”) in which investors signed a Deed of Assignment assigning all rental income from their properties to Prosperity. Prosperity had allegedly entered into a guaranteed rental contract with a tenant company which would pay Prosperity a 10% net rental return every year for 5 years (if 50% was owed by the investor) or 7 years (if 70% was owed by the investor). The company which Prosperity claimed was providing the guaranteed rental scheme was Let Me Property Ltd (“Let Me”).
The apartments were effectively being sold under a very easy and affordable deposit arrangement with nothing further to pay for the 5 year or 7 year term.
However, this not how things turned out. The 24 month staged payment deposit terms were suddenly cut short. The 30% deposit deal was changed to the 50% deposit deal, increasing the sum that the 30% investors would have to pay. Then all 50% deposit investors (including those who were originally on a 30% deposit deal) were told to pay the deposit up in full or they would lose all their previous payments and their purchase contracts would be cancelled.
It was also announced that Let Me had withdrawn and the Scheme would now be open-ended i.e there was no longer any guaranteed rental arrangement. The balance would be paid from rental income as and when it is received.
As if this was not bad enough, the rental income falls well short of the 10% net described in the marketing material assuming that investors actually have a tenant which is by no means guaranteed. Investors are now effectively tied into a purchase which could take decades to pay off.
To add further insult to injury, the costs such as ground rent and service charges are substantially higher than investors were led to believe. The ground rent has doubled and the service charge being applied to Parkwood Court, one of the tower blocks, has risen by 66% in the first year. Investors are faced with ongoing losses in the years ahead.
There have been serious tenant issues with graffiti in the corridors, vandalism, excessive noise from some tenants, antisocial behaviour and a stabbing. The quality and behaviour of existing tenants in the tower blocks is poor, ensuring that only low quality tenants are being attracted which in itself ensures that there is little chance of increasing rental income.
The rental agency which is now handling the rental contract is Lamont Estates Ltd (“Lamont”), a company owned by Jonathan Billingham the owner of the Prosperity chain of companies. Investors are finding it very difficult to get information from Lamont about their properties. They are reporting that in some cases they do not know if their property has been let, what the rental income is, whether any rent money has actually been paid (because several investors report they have been told their tenant left and did not pay anything) and what charges Lamont is actually deducting from any rental income. In summary, there is the potential for Lamont to be misappropriating funds and not applying them to the debt owed by the investor. All in all it is a very sorry state of affairs for investors.
Land Registry records show that Prosperity never owned a single apartment. All 192 apartments were sold to investors before Prosperity had to complete on any purchase.
Safe Or Scam is withholding information which our barrister believes gives investors rights to compensation claims and contract cancellations. That information is for the investors’ solicitor to use as he sees fit.