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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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. I used to live in London While i was there ... I

Resolved Question:

Hi.
I used to live in London While i was there ...
I bought one property in London which I have bond 230,000 and equity 100,000+/-.
This gives me about 500 GBP a month which I use to live in South Africa.
I made an investment into a bogus deal of 12 Liverpool properties which now have have a value of approx 40,000each and morgage of 65,000. So huge negative equity.
The Rental income is 2100 which leaves a shortfall of 150 GBP per month.
I am runnign out of savings but have no other debit. I am slowly sinking. I cannot get a Job in South Africa. And mentally cannot face returning to the UK just to service these properties. Also is seems at any minute a new Law,TAx, Intrest Hike could flatten me completely.
Is there anything I can do?
Is there anything I can do?
I am slowly sinking
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

What is it you want to achieve?

Customer:

I'd like to somehow take the "investment" I made of 18,000 which got me in this mess and all the money to date I,ve spent adn in the "investment" and right it off. I'd Like not to loose my Pension and my London House and be able to work again for a future, without this investment sucking the life out of me and causing me endless stress . How do I build a future with something like this waiting to explode and take everything!!! All the rules in the world seem to be against land lords with a new Land Lord Lieccence just been intruduced which they want 4800 GBP for? Where do i fund that?

Customer:

I'd like to somehow take the "investment" I made of 18,000 which got me in this mess and all the money to date I’ve spent and in the "investment" and right it off. I'd like not to lose my Pension and my London House and be able to work again for a future, without this investment sucking the life out of me and causing me endless stress. How do I build a future with something like this waiting to explode and take everything!!! All the rules in the world seem to be against land lords with a new Land Lord Licence just been introduced which they want 4800 GBP for? Where do I find that?

Alex Watts :

Sorry I do not quite understand?

Alex Watts :

What is your legal question of me today and I will see if I can help?

Customer:

I'd Like to know what is possible? Do I sell the london house and last as long as I can until I have nothing? Do I fiel for bankruptsy now? How do I make this liverpool buy-to-let property go away?

Alex Watts :

How much do you currently owe?

Customer:

I do not currently owe anything. Please refer to the original question

Alex Watts :

It says you have a shortfall of £150 a month and running out of savings.

Alex Watts :

How much do you currently owe? Or are you not in arrears?

Customer:

I am not in Arrears. I can manage the GBP150. However it is the huge burden of the negative equity of the 12 liverpool properties that leaves me with no sleep. If I try to build my life in south africa and mae savings as well as hold onto the house in London so that I will be able to provide for myself in old age.

Customer:

SORRY PRESSED ENTER TOO EARLY PLEASE READ BELLOW>>>

Customer:

I am not in Arrears.

I can manage the GBP150.

However it is the huge burden of the negative equity of the 12 Liverpool properties that leaves me with no sleep.

If I try to build my life and make savings as well as hold onto my house in London and continue to make contributions to my pension fund it all seems worthless.

I cannot protect myself from the huge negative equity of the Buy-to-let properties I own in Liverpool.

I was “coned” into buying into this “investment” and originally did try give them back or sue the sellers, however they liquidated and disappeared shortly afterwards. I then tried to sell the properties. But in the 3 months that the transfer took, the properties went from been valued by the lenders at 80K each to 40K each if you could sell them. My mortgages are 60K each. Leaving a shortfall of 20K each x 12 or 240K.

It is important to know that these properties only bring in about 300-400GBP per month rent, 80 goes to block management, they are often wrecked by the tenants, often the rent is not paid and it rakes 3-4 months to evict the tenant at huge cost. This with management fees and mortgages of between 150 and 300 each they quickly ate up my savings and my salary and I was about to go bankrupt and lose everything when. I managed to structure an option to purchase deal with an individual (Danny) in Liverpool, who manages properties.

This Option to Purchase means that he collects the rental income and looks after the properties and pays the mortgages with a shortfall of 150GBP / Month. Once the equity returns in 10 or 20 years he will then sell and keep the profit.

Problem is that they are still in my name and should anything happen to Danny or the situation worsen, he would simply default and loose his option to purchase. Which he is now threatening. What with raising costs and new licensing fees demanded by Liverpool council as well as bad tenants which the law does nothing to protect the landlord from is making the situation un-workable.

So coming back to if Danny defaulted on the option to purchase. The properties would then fall back to me to look after. As I do not live in Liverpool it would be impossible for me with outsourcing works, management fees, etcetera to cover the mortgages.

The money I get and have saved from now till then would be quickly eaten up again and I’d lose everything. Only this would happen in 10 or 15 years when I no longer have the ability to build a pension.

So I know find myself in a position where I have 4 possible options:



  1. Stop paying he mortgages default and file for bankruptcy now. Loose everything and start again. (Can they take my pension and home?)

  2. Sell my London property use the money, go on holiday, and then revert to option 1 in a year or two.

  3. Work hard save for retirement and hope that the equity returns and Danny honours the option to purchase.

  4. Somehow trust in Justice that the mortgage lenders who I have bailed out with my TAX money. Who valued the properties, are brought to book and absorb the responsibility and leave me with my house and pension and allow me to start again.


I really don’t know what to do, the lenders will simply not talk to me to help. I have tried to explain this to the mortgage lender but they will not help. So I am of the opinion that I should sell the London house and give the money to a charity then let them act against me. By the time the Liverpool houses sell I’ll have nothing but a huge negative equity bill and a very small inconsistent salary in South Africa were I now live. I am married out of community of property in this country. I’ll face a 5 year black listing.

What can I do??? Extremely stressed and unable to hold a job!!!

Thanks Kemble

Alex Watts :

Indeed. How much are you in negative equity in total?

Customer:

Liverpool is almost impossible to sell but even if you do you will not get more than say 40-45K on average.. So 65-40 is 25K per property or approx 300K worst case..

Customer:

Can they take my london home, even although i bought it before makeing this investment? and can they take my pension?

Alex Watts : I have given this some thought. It's bad news I am afraid. Unles you sue the people that scammed you this means you are liable.
Alex Watts : The only choices now are to sue the people who scammed, make a deal with the debts or go bankrupt.
Alex Watts : However if the debt is in your name they can come after your own property, even though it was before the investment and they cam take your pension
Alex Watts : If you are bankrupt all assets belong to the official receiver who can dispose of them.
Alex Watts : If you have equity in your home you could purchase that and the property would be safe
Alex Watts : But apart from the above those are the only options
Alex Watts : I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest
Alex Watts : Can I clarify anything for you about this today please?
Customer:

So you are saying they can take my pension? and also that they can take my house and what ever equity is in the house? How do I buy the house to make it safe?

Alex Watts :

Sadly yes they can do.

Alex Watts :

Once you become bankrupt the Receiver will give you the option to buy back

Alex Watts :

But you can't do that until the Receiver offers it to you

Alex Watts :

I am sorry

Alex Watts :

Does that help?

Customer:

So what is your advise. How do I go forward?

Alex Watts :

Go bankrupt if you really can't afford it, you will be released after 12 months.

Alex Watts :

Then apply to buy back the equity in your main home

Alex Watts :

Does that help?

Customer:

could i not cash in my pension and sell my house, with the extra cash I could afford the Liverpool morgages until the money runs out. Hopefully by then liverpool prices have increased and I can sell or else then i will be forced to go backrupt?

Alex Watts :

You could do that yes.

Alex Watts :

But of course that is a risk with no guarantee at the end of it

Alex Watts :

I am very sorry for your situation

Alex Watts :

Might I suggest you contact Stepchange -they are a debt charity

Alex Watts :

http://www.stepchange.org/

Alex Watts :

They may be able to contact your creditors and freeze or reduce interest

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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