Spindogs

Property Investment & UCIS Scams

Property investment is a well-recognised financial strategy that can be extremely lucrative for  the savvy investor seeking rental income and growth in capital value.  However, over the last 10 years there have been a series of property scams operated from within the UK. These are aimed at luring inexperienced investors from the UK and overseas with promises of fixed income levels and guaranteed buy back arrangements that have seen investors lose millions.

Property investment scams are often marketed as alternative investment in office units, hotel rooms, student accommodation or storage units offering attractive or guaranteed percentage returns, rental guarantees and buy back arrangements. These scams are often unlawfully operated collective investment schemes.

The investor will typically be persuaded by a sales agent to pay with a substantial deposit or reservation fee to acquire a lease within a development property which is to be managed on their behalf by a separate company. The investors’ money is then pooled with other investors funds to pay the promised fixed returns for an initial period but in most cases the property scheme then fails or is never completed leaving investors seriously out of pocket.

Our specialist team are acting on behalf of UK and foreign investors in claims against the operators of these schemes as well as bringing professional negligence claims against solicitors and financial advisors involved.

Our clients typically seek recovery of between £30,000 and £120,000.

If you have suffered financial losses in a property investment you may be entitled to compensation. We are already working on cases relating to several property investment schemes. If you are not sure who is to blame, we can use our specialist knowledge to investigate and give you advise as to your options.

We offer free advice and guidance without obligation. If you choose to instruct Hugh James solicitors, we will fight your case on a ‘no win, no fee’ basis.

 

For further details and how to receive your free consultation, contact our special team today.

 

What is a collective investment scheme?

A collective investment scheme (‘CIS’) is a pooled investment fund, whereby a number of investors transfer their money into one pot. A fund manager will then take that money and invest it into one or more assets. These assets can be anything from property, agricultural assets, bonds or even stocks and shares. These schemes may be authorised by the Financial Conduct Authority when based in the UK, or as a ‘recognised’ scheme when based overseas.

What is an unregulated collective investment scheme?

An unregulated collective investment scheme (‘UCIS’) is a CIS which has not been authorised or recognised by the FCA.

A UCIS may invest in riskier assets or use riskier investment strategies than an authorised or recognised scheme. As UCIS’s are not subject to regulation and restrictions under the FCA rules, they are by their very nature, high risk and highly speculative.

Whilst a UCIS is a high-risk investment option, they can be promoted to specific types of investors such as certified high net worth and sophisticated investors. A UCIS cannot be promoted to ordinary members of the public, however, unfortunately this continues to occur despite a number of warnings being issued by the FCA.

 

What are some examples of a UCIS?

A UCIS can take a variety of forms. Some of the types of investment opportunities Hugh James have experience of dealing with include:

  • Hotel Rooms and suites
  • Apartments
  • Desk spaces in office buildings
  • Rooms in care homes
  • Storage units

 

Who can I bring a claim against?

Where property ownership is the subject of a UCIS, such as purchasing the leasehold ownership of a desk space in an office, it is highly likely that the expertise of a conveyancing solicitor would have been used to complete the transaction.

A solicitor has a duty of care to advise their clients as to the risks and legality of such a purchase. In fact, the Solicitors Regulation Authority has released a number of warnings to solicitors over the last decade warning against the involvement in UCIS’ and pointing out the red flags of such schemes.

Where a solicitor has failed to appropriately give warnings that the investment may be a UCIS, or if they have not ceased to act where there is any doubt about legitimacy of the transactions, then an investor may be able to bring a claim for professional negligence against that solicitor.

 

Why use Hugh James?

You can read all about our firm here, and below are just some of the reasons to trust us with your property investment scam claim:

  • Our solicitors are and The Legal 500 independent guides in this area of law.
  • We are a Top 100 UK law firm, with ambitions to reach the Top 50.
  • We’re fully regulated by the Solicitors’ Regulation Authority.
  • Our culture is based on the key values of hard work, exceptional talent, ambition, empathy, innovation and good humour.
  • We have a strong sense of social responsibility, which extends to reducing our carbon footprint through specially designed offices and working with charities both locally and nationally.
  • Founded in 1960, we have more than 60 years’ experience and can provide a wide range of specialist services and support.
  • Hugh James has wealth of litigation experience dealing with high value complex financial investment cases

Key contact

Neil is an elected partner on the firm’s board of management. He is also head of the firm’s financial mis-selling team, specialising in handling claims for financial mis-selling relating to pension mis-selling, timeshare purchase, annuities, mortgages and insurance.

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Key contact

James began his legal career in Hugh James in 2014 as a paralegal. He then went on to complete his training contract and qualified as a solicitor in March 2019. He is currently a member of the Financial Mis-Selling team where he specialises in recovering compensation relating to property investment scams, pensions, mortgages and other financial products.

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