King's Dock Mill Development
Kings Dock Mill - 49 Hurst Street - L1 8AN / L1 8AJ - Attention owners and investors.
It has come to our attention that investors in the Kings Dock Mill (49 Hurst Street and not to be confused with 32 Tabley Street) development in Liverpool City Centre by YPG have been experiencing increasing issues and frustrations.
"I am not a professional property investor, and as such have no expertise in the area. I originally purchased the flat in KDM with the view of it being a hassle-free hands-off investment. Unfortunately, that was not the case. There were many delays to completion, and once that milestone was achieved, the following months went by with none of the rent owed to me, through the Property Management Agreement, being delivered. I contacted the developer on numerous occasions and was given many assurances that the error will be rectified, however it never was. Through my own research, I was referred to James Lindsey (Lewis and Foy) and his advice and guidance over the months has been instrumental in assisting me to regain control of my investment. With Lewis and Foy managing, I recently received my first rental income from the property." - Ed
We are aware of the significant delays the build program has experienced. The pandemic has been, but it is evident that the issues were there beforehand and the pandemic has been used as a convenient excuse, as in many walks of life.
We were contacted many months ago by a frustrated landlord who was not being paid any of the “guaranteed return” which they were promised and contracted to receive from the developer. This particular development and subsequent investment comes with an option of a “guaranteed/assured net return of 7%” for a period of 3 years and is referred to as a “PMA” (Property Management Agreement). This agreement then places up to 4 people/entities into the situation, these being; you (the owner), the developer, the developers appointed letting agent and last but not least, a paying tenant.
What is not made abundantly clear is that the above arrangement is essentially a rent to rent, or sub-leasing agreement. The developer or “guaranteed return” company become your (the owner) tenants, your tenant (the developer) then contracts a letting agent to let the property on their behalf and then an unsuspecting tenant rents from the letting agent, totally unaware of the complicated structure in the background.
It is sad to say that the vast majority of these types of “guaranteed return” schemes fail to pay the return for the contracted period, if at all!!! The company who provides the “guarantee” is usually (not always) a separate and newly formed company of which holds no assets, this essentially provides very little chance of being able to recover the contracted monies and will leave you struggling to regain control of your own property.
We have recently found the developer is no longer contesting a process of us (Lewis & Foy) being engaged directly by the property owner, taking back control of the property and any tenants who may be occupying. Lewis and Foy can then arrange for the rent to be collected by and paid directly to the property owner each month.
Where Lewis & Foy Lettings have taken over the management of apartments within Kings Dock Mill, we have been alarmed to discover that the properties in question had a gas appliance installed but there was no valid Gas Safety certificate in place. Whilst this may seem trivial to some people, it is a legal requirement for all rented properties to have a current and valid Gas Safety certificate and this must be provided to the sitting tenant. Further details on the rules and requirements can be found at: https://www.hse.gov.uk/gas/domestic/faqtenant.htm. If you decide to read this information, please pay particular attention to the section “What if the property is ’sublet’?” as this is the situation with the “guaranteed return” or PMA and clearly states that you as the owner are still ultimately responsible for the compliance and safety of the property and occupants.
We are unsure of the connection and relationship between the developer and the current letting agent, but assume the financial benefits to both parties would not encourage either to approach you as the property owner with a resolution to receive the return on your property investment that you deserve and expect.
We want property investing here in Liverpool to be a good experience and provide the realistic returns any investor is due.
If you would like to discuss your property and investment further with us, please do not hesitate to reach out and we will help in any which way we can.