G4S – Am I being scammed?

Hi Onslow

The call was likely to be from a letting agency acting on behalf of G4S. They do indeed have a government contract and offer leases for up to 5 years on properties within a certain distance of selected sorting offices.

It can be a great deal for owners without mortgages, but by accepting such a deal, if you had a BTL mortgage you would probably be in breach of your mortgage conditions. The other downside is insurance but I suspect they may have that covered now by offering an FRI (Fully Repairing and Insuring) lease.

As long as the property meets with certain standards they will generally make an offer.

I cannot say whether you call was a scam and in any event it was not of interest to you. What I would say to anybody else who receives such calls is say no if you have a traditional BTL mortgage and if you haven't, trust but verify. Before you sign anything, seek legal advice. A simple check you can do is to call G4S to check that the agent is genuinely acting on their behalf. If you are contacted by G4S, take the name and extension number of person calling you, then Google the telephone number for G4S and call them directly and ask to be put through to the person who gave you their name and their extension number, i.e. "may I speak to Bloggs on extension XYZ please?".
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I've also been approached by a co. offering to provide guaranteed rent. They will then let the flat on a room-by-room basis to professional tenants.

The guaranteed rent might sound attractive, but I question how guaranteed their guarantee is. They are also a ltd co, so limited options in pursuing them for anything.

Also, as Mark alludes to, giving the flat over to them is creating a sublet situation, which is in breach of probably most mortgage and insurance contracts.

Reply to the comment left by "Kevin Thomson" at "21/11/2014 - 10:51":

Be very wary of private operators offering contracts of the nature. All of the points you have raised are very relevant. A guarantee is only as strong as the guarantor.

If you are looking into doing a deal with an unknown private operator you will need a contract which offers you maximum protection - see >>> http://www.property118.com/guaranteed-rent-to-rent-lease-contract-template-download/41817/

There are, of course, several legitimate scheme operators including G4S, Councils and Housing Associations where the guarantee is far stronger. The points already made regarding insurance and mortgage conditions should, however, be borne in mind nonetheless.
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getting finance to buy such a property is indeed remarkably tricky as many lenders do not like so many principals in between them and repossession - should it be required.....

Reply to the comment left by "All BankersAreBarstewards Smith" at "21/11/2014 - 12:53":

Paragon, Aldermore, Shawbrook, handlesbanken and the specialist lending arms of the major banks will consider them on commercial terms though.
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With hindsight I don't think it was a scam but in my opinion was handled unprofessionally. The caller didn't know me or details of the property but was prepared to guarantee me 3 years rent.

I presume a more detailed investigation would have followed but it all seemed a bit too good to be true. He didn't ask any questions regarding my mortgage which of course would probably not have allowed such a scheme, would this have been made clear if i'd gone ahead? Who knows, but could have left me in a very difficult position.

Reply to the comment left by "Onslow Clough" at "21/11/2014 - 17:21":

Indeed, some agents just want to get this business because they see easy £ £ £ £ 's and don't give too hoots about landlords so don't bother mentioning important factors like mortgages. Maybe they would have done so eventually in the hope that they would get to let and manage your property anyway. I wouldn't be surprised if they were just using the G4S name just to get in with more new landlords.
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Reply to the comment left by "Mark Alexander" at "21/11/2014 - 17:32":

Using G4S's name seems likely as their detailed knowledge of the scheme was limited and they were reluctant to Email any information because it ran to a whole 45 pages, what difference this made on an Email was not explained.

Please be really careful. G4S and Serco have been scrutinized and heavily criticized by the NAO and the Public Accounts committee and are on the verge of losing their government contracts for housing vulnerable people.

http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/asylum-accommodation-substantive/

Landlords were not paid rent and properties fell into disrepair. Kazuri did a report about it and we interviewed over 50 of their tenants, not one of them was happy and complained about G4S as a landlord. They have never been landlords before, all they care about is the profit.

http://kazuri.org.uk/images/PDFs/Carers_or_Captors_and_complaints.pdf

Below is an extract from the government report:

"The standard of the accommodation provided has often been unacceptably poor for a very fragile group of individuals and families. The companies failed to improve quality in a timely manner. None of this was helped by the Department’s failure to impose penalties on contractors in the transition period. It is disturbing that over a year into the contract the accommodation is still not of the required standard and the Department has only chalked up £8 million in savings."

G4S do not pay their supply chain, again we had to make a winding up order against them in order to force payment.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/11764376.html

Thanks Farah, very interesting reading and a warning to those tempted by what seems like easy money.