Buyers Beware

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A worrying trend appears to be emerging in Ireland “overseas property investors” seem to be walking away from their foreign property investments in their droves.

People who bought during the boom years are now finding the value of their properties has slumped to the point that they are having to simply hand their keys back to the bank and walk away. Some of these individuals have not even been able to enjoy a single day in their foreign homes because they were bought off-plan, meaning they paid their money on the basis of a projected building yet to be built on a certain plot of land. Now these projects are nearing completion and the final staged payments are becoming due, property owners are realising they have already paid two or three times what their investment is now worth, without even adding in this final payment.

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Fraud investigators are looking at a suspected international property scam that has left investors more than £40 million out-of-pocket.

Ocean View Properties, based in Staffordshire, has gone in to administration claiming overseas developers forced the company to stop trading after failing to repay millions of Euros handed over as deposits on behalf of investors.

A notice to investors on the company website claims: “Adverse press reports have undoubtedly contributed to the company’s demise though we have communicated and continue to communicate with the relevant media personnel to correct the inaccuracies that they appear to have been fed.

“It is worth noting here that there are clearly a number of people who have appeared in these articles who have subsequently confirmed that they were never personally approached or that they have been misquoted.

“With regards to the allegations surrounding Sean Woodall we can confirm that he acted as a ‘land finding’ agent for us for a period of around 4 years. It subsequently transpired that, not only was he creating problems with the developers that we were working with but he also had a ‘history’. Accordingly links between us and he were severed in 2005.”

This statement refers to articles in the Sunday Express that alleged hundreds of investors have been left at least £80,000 each out of pocket after major off-plan property deals in Spain’s Costa del Sol never materialised.

Customers were told their cash was being held in legal escrow accounts, said the newspaper, but when they asked for refunds, the money had disappeared.

Sean Woodhall set up his own company, Worldwide Destinations after falling out with Ocean View, copying the Ocean View business model in Egypt, Brazil and the Dominican Republic.

In May last year, a light aircraft said to be carrying Woodhall was reported to have crashed over Brazil.

His body has never been recovered, but he was declared dead last autumn.

Fraud officers from Staffordshire Police, City of London Police and the Serious Fraud Office are currently investigating Ocean View to see if any evidence exists to support criminal allegations.

Ocean View was set up in 2001 by buy-to-let millionaire Colin Thomas, other businessmen and Sean Woodhall, a convicted fraudster.

Investors were persuaded to buy off-plan apartments in southern Spain.

Several celebrities were involved in the marketing – but there are no suggestions of wrongdoing against any of them. They include Martin Roberts,  presenter of the BBC’s Homes Under the Hammer property programme.

He claims the company owes him and his partner about £200,000.

England international footballers Gareth Barry and Alan Smith also bought properties successfully from Ocean View.

The Con Man by Ken Mitchell Every cloud has a silver lining, even the black cloud of recession.

One of the upsides is that fraudsters running Ponzi schemes hit a wall, as they can’t keep the scheme as their cash dries up.

The latest allegations of property fraud with a Ponzi scheme surround Canadian father and son team Frederick and Derek Elliott.

Lawyers have filed evidence at a Miami Court claiming the pair embezzled $100 million from more than 2,500 investors from all over the world in two separate fraud plots.

The first case, according to the court documents, involves $32 million raised from 1,600 investors between 1987 and 2001 for developing the Sun Village Resort in Puerto Plata, Dominican Republic.

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An international property fraudster who duped investors with fake developments in Dubai and Spain faces another 30 years in jail.

Maz Akhtar, once hailed as a charismatic property guru, has been convicted by a Dubai court on 30 counts. He is already serving a one year in jail term after last year being found guilty of deceit and embezzlement.

It was reported Akhtar, a UK national also known as Maz Khan, had defrauded Dubai residents of over £2m. He has also left a trail of multi million pound scams in Ireland, Norway, Malta and Spain.

In Norway his property marketing company went into liquidation leaving investors with heavy losses. In Ireland investors complained they lost over £2m in a pyramid selling scam linked to metal and coin dealing.

Wanted internationally, Akhtar was arrested in Dubai in January last year following a high speed dash to the Abu Dhabi airport in his Ferrari.

Among the developments he marketed through his company, HK Inversiones, was the fictitious Reserva de Miraflores in Spain, which he began ‘selling’ in Dubai in 2003. This he described as ‘an elegant gated community of Mediterranean style villas and apartments, situated near Manilva, a highly sought after location, ideally suited to both investors and residential buyers’.

A company statement said it had been ‘delighted with the overwhelmingly positive response so far to the Reserva’, and claimed it had sold 70 per cent of the development in less than four months.

Other bogus developments marketed by Akhtar were the Star Islands project in Sharjah and the Seven Wonders of the World project in Dubai. Dubai officials picked up that he was marketing developments that had not been started and as long ago as 2004 issued a warning that one of his developments did not even have planning permission.

A favourite marketing method was through the use of free seminars. Promotion for one such seminar in Abu Dhabi promised that ‘international property and investment specialist Maz Akhtar’ would ‘share his valuable insight, and reveal the secrets of success for investing in overseas property’.

It claimed ‘HK property seminars have been a huge hit in Europe, with people getting exclusive information on exactly what to look for, and how to maximise their return.

‘It seems where Maz goes is the place to go, and right now his hottest tip is southern Spain’s Costa Del Sol. Spain is a star performer among world property markets, with house prices continuing to climb every year by between 15 per cent and 50 per cent’.

Maz won’t now be going anywhere for some time.

Under Dubai law Akhtar needed a Dubai national as a majority shareholder for his company. His troubles are said to have started locally when the man he had talked into this, Mohammed Meer Khori, received a call from a friend saying he had invested in one of the company’s developments about which Khori knew nothing.

Source: Fly2Let

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IRISH overseas buyers were accused yesterday of putting little or no thought into purchasing property abroad.

The claim was made after it emerged that Irish buyers were increasingly signing foreign-language documents without knowing what they mean, and buying apartments without legal advice.

A legal adviser said Irish investors were playing ‘Russian roulette’ when it comes to overseas property.

Most people at home would not consider buying without seeking the advice of a solicitor but they are doing it abroad, according to Catherine O’Sullivan of Overseas Property Law (OPL) in Dublin.

Problems

“We have already seen a number of cases where investors have signed documentation without taking any legal advice, and have subsequently run into problems.

“While some buyers bring their contract to their own solicitor, Irish solicitors cannot be expected to carry the required overseas local legal knowledge to enable them to properly assist Irish clients,” Ms O’Sullivan said.

An Irish solicitor may be able to give a broad overview of the contract, but they will not be able to do the necessary searches to ensure that the seller owns the property and is entitled to sell it.

OPL warned all SSIA account holders who are considering investing their money in overseas property to seek independent advice before they leap into bricks and mortar in foreign lands.

As property prices in Ireland soar on a daily basis, many Irish people are choosing to invest in property abroad in a bid to get on the property ladder.

But OPL said it fears that many people will not investigate the legal and tax system accurately of the country they have chosen, and may experience major pitfalls along the way.

Ms O’Sullivan added: “It is imperative if you are considering buying property abroad that you thoroughly investigate both the tax and legal implications of your purchase.

“The best way to do this is to enlist the help of an independent adviser who has knowledge of the area you are buying in.

“We have already seen overseas investment horror stories that could have been easily avoided, if the investors had done their homework properly before they purchased.

OPL said some investors have even been forced to undervalue the property when the final transfer deed is signed, simply to reduce stamp duty.

However, this practice can actually lead to a higher tax liability further down the line.

Overseas Property Law offer legal and tax services to Irish investors considering buying in the Portugal, Spain, France, Germany, Hungary, Bulgaria, Slovakia, Romania, Italy, Turkey , USA, Dubai, UK and Poland.

Source: Unison.ie