Landlord Action warns investors about rogue property sourcing companies

Landlord Action warns investors about rogue property sourcing companies

Landlord Action, a company specialising in tenant eviction and troubleshooting throughout the UK, has recently reported that their debt recovery department has never been busier due to pursuing rogue property sourcing and investment companies. Worryingly there are an increasing number of companies who have been asking for upfront fees to source below market value deals and marketing property deals that, once surveyed for mortgage purposes, are figures far short of the original claim. Companies then refuse to refund fees so investors employ the services of Landlord Action to help recover their monies.

Paul Shamplina, Director of Landlord Action comments: “As the market climate has changed some companies are struggling financially and are using investor deposits to fund their business operations rather than holding funds on deposits to be returned if deals do not happen. Therefore, we are seeing an increase in the number of instructions for individuals and companies who it seems have been ripping off investors by supplying ‘bogus discount deals’. The industry needs to be governed to include a code of conduct in regards to these companies, working closely with the FSA.”

One such company, one that Landlord Action have issued a number of legal proceedings against, the Ahuja Group, are certainly one of these firms where clients have discovered that many of the deals they promoted were an illusion. One private investor found herself the victim of the Ahuja Group when she brought a deal at £3,000 that she thought fitted her investment criteria. The value of the property was supposed to be £100,000 with a monthly rental income of £1,541. Once the survey had been completed the valuation came in at £72,000 and the rental figure at just £375, a figure far off what had been originally claimed. Landlord Action was instructed and a claim for £4,816 including legal costs was proceeded with via the Small Claims Court. This was ignored so, eventually, the court appointed sheriffs to place ‘notice to remove’ on three cars at the directors home address. With no payment still received they returned and seized one of the cars. The investor in question has now received payment in full.

Shamplina says: “These rogue sourcing companies are often unwilling to release many details on the property so investors need to research themselves into the property values, rental prices and the level of demand in the area. As well as this I would highly recommend that investors research the sourcing company itself via its trading record and look at its auditing history. Also, although not guaranteed, listen to other investor’s recommendations. There is a good chance the company is reputable if others have received a good level of service. My final advice, when going through with a deal, is to double check the terms and conditions and keep in regular contact with the company in question.”

Landlord Action

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