Investors outraged by Parliament Residence saga
People who invested up to £100,000 each in off-plan apartments at the Baltic Triangle development have asked its new owner Legacie Developments to help them salvage their investments.
Work on the 145-apartment second phase of Parliament Residence – previously being delivered by a vehicle of developer Assetcorp called AC Parl Street 2 – stalled at the end of last year. David Currie & Co was appointed as receiver to sell the project to recover a charge for one of Assetcorp’s creditors, Collateral Investments, as revealed by Place North West in December.
Liverpool-based Legacie last week stepped in to buy the scheme for around £6m. However, the acquisition means investors could lose the deposits they have paid to buy the one- and two-bedroom apartments being developed. This is because AC Parl Street 2 took out loans from Collateral Investments to progress the development, and the funder – a secured creditor – is now expecting to recoup that cash through the receivership and sale.
Investors, meanwhile, claim to have forked out deposits of up to 70%, and, as unsecured creditors, it is not clear where their money is and how it can be recouped.
The project, whose 50-apartment first phase is complete, is currently around 70% built. Legacie has said it plans to invest an additional £15m-£20m to complete the building before selling the apartments on, leaving around 140 individuals feeling insecure about the future of their investments.
A spokesperson for Legacie declined to comment on the likely outcome for investors, stating that “it would not be appropriate for Legacie to comment on the failings of another business”.
Luis Demelo from Luxembourg, told Place North West he invested just over £100,000 into the project to reserve an apartment for his daughter, who was to attend the University of Liverpool.
“I have lost 20 years of my savings that I won’t be able to recover,” he said. “I’m astonished this is all legal and that no UK authority supervised the scheme or will intervene to help us recover our monies.”
Demelo implored Legacie to work with investors to complete the project so that they would see some return on their investment. Another investor, Richard Minney, hopes for the same outcome.
“I hope that there is a way for Legacie not only to rescue the building but to find a way to rescue the investors,” Minney said. “I look forward to working with this developer, which appears to have a good reputation for delivering projects, to make this work.”
Minney said he invested around £93,000 in the scheme in 2017 but became concerned about the direction of the project when Assetcorp sent a letter to investors asking for more money to fund the completion of the 11-storey building towards the end of last year.
Investors were not due to pay their final instalments until the development was completed and ready to handover. However, Minney sent the money to his lawyers who fortunately held the funds back, unconvinced that the development was complete, he said.
Minney described the treatment of “small-time” investors by developers as “shocking” and said more needs to be done in general to protect them from similar situations.
“After so many years and so many failed investment schemes, why is Liverpool City Council and [UK markets regulator] the Financial Conduct Authority not taking action?”
A third investor, Peter Hopkisson, said he had seen no suggestion of serious problems with Parliament Residence between 2017 when he decided to invest last November.
Hopkisson, who claims to have put £100,000 into the project, said: “The speed at which events unfolded at the end of November through to December has left a very bad feeling about the whole system.
“It will be soul-destroying to see the building finished, thinking about what should have been for us. We feel totally let down by our solicitors and by Assetcorp in particular.”
Hopkisson called for stricter regulation of the fractional sales model – the investment model by which Parliament Residence was funded – as well as more scrutiny of developers and a higher level of transparency to limit damage inflicted upon investors.
“In the case of Parliament Residence phase two, we believed we were fully protected but this seems not to have been the case. We will now take steps to achieve legal redress.” He did not detail what these steps may include.
Attempts have been made to contact Assetcorp for a response.