Keystone Asset Management Ltd – Voluntary Administration

Further to the landlord who has been left to manage his own property after Keystone went into liquidation.

I bought a property from Keystone in December 2013 at a price that included complete refurbishment, furnishing, HMO licencing and sourcing and managing tenants. For the past year I have been chasing them for updates on the refurbishment and letting. They stripped out the house, a five bedroom house in Rotherham, but have not refurbished it or obtained the HMO licence so I am left with a house I can't let and in no condition to sell at a decent price. Any suggestions or advice would be welcome.

Thanks
Alice Leyland

Reply to the comment left by "Alice Leyland" at "03/02/2015 - 11:50":

Hi Alice

I can't help but wonder whether a crime has been committed, i.e. "Fraud By Abuse of Position"

Please see >>> http://privateprosecutions.org/
.

Reply to the comment left by "Alice Leyland" at "03/02/2015 - 11:50":

Alice I have a contact who MAY be able to complete the works and possibly do a R2R, let me know if you would be interested in his contact details.

Reply to the comment left by "Alice Leyland" at "03/02/2015 - 11:50":

Alice, after much investigation I can. You can contact me via my office if you google 'David Davis, Highscope'.

Reply to the comment left by "Mark Alexander" at "03/02/2015 - 12:26":

Yes, that had occurred to me, as we were induced to pay more that than the market price for the house at the time to allow for the refurbishment, purchase of furniture etc. and were made promises about RICS valuations and HMO licences. I also suspect fraud because there is a separate business, Bolton Hall, a care home which has the same directors and basic business model, is sold through the same agents and started up at about the same time as I bought my property. The only difference is that Keystone tell me that Bolton Hall is a completely separate business and not in liquidation.

Reply to the comment left by "Neal Craven" at "03/02/2015 - 12:32":

Thank you Neal. We are going to attend a creditors meeting next week so will know a bit more about the situation and our options then, I may well want to make contact with someone who can complete the works and do a R2R so I may be in touch after that.

Reply to the comment left by "Alice Leyland" at "03/02/2015 - 11:50":

Hi Alice

I took on a house that a London based person had been persuaded to buy as an investment by one of these property sourcing companies that were very prevalent during the period just before the 2008 property crash. They had purchased a 3 bed semi-detached house near Rotherham for a bargain price. Problem was that the agent then did not get the rent in from the tenant, the tenant was eventually evicted and the house was left in a very poor condition, letting agent was unsuccessful in re-letting it, so landlord gave it to the local council to manage but they did not get a tenant either and the house deteriorated to the point where it was uninhabitable. Mortgage rates had gone up and values had come down, so also in negative equity. Landlord ended up stuck with a house in negative equity, that they could not sell (without declaring personal bankruptcy), that they could not afford to get renovated, that they could not let (nobody wanted it due to its condition), and they could not manage or do anything with because they lived and worked in London. The house then stood empty for about 3 years, and deteriorated further. (Thankfully it was in a good area, so was not broken into, stripped out (coppered), vandalised, or set fire to).

I provided them with a solution. I took on a lease of the property on the basis that I would spend many £thousands on renovating it, and would then recover my investment via the rent received from me letting out the house. I had a number of setbacks along the way (start doing one job and discover ten more that need doing!!!), but I did eventually get it finished and re-let, and it has been let now for about a year. Another 15-18 months and I should (hopefully) have recovered my investment and then start making a profit.

The owner did not have to go bankrupt, and now has an asset not a liability, it is an appreciating asset, the capital value has increased due to the renovation works I've done to it, and at the end of the lease term the owner can choose whether to re-lease it to me (at a higher rent), or sell it, or let and manage it herself. It is my solutions that gave her these options.

While I don't want to do this again (it really stretched my cashflow, so I'm not touting for business), if you can find a "cash rich" reputable company/person who can/will do something similar, then this could be a solution for you. However, as I'm sure you've learnt from your experience of Keystone, there are a lot of sharks out there, lots of people who will make promises that they then don't keep, so be very careful.

Very sensible solution, did you need the mortgage company approval for the letting?

Reply to the comment left by "Neal Craven" at "06/02/2015 - 09:53":

I believe it was bought as a "buy to let" investment anyway, and that was the basis of the mortgage, but what further consents the owner obtained I do not know as I don't get involved in other people's mortgage arrangements.

I have limited experience with encumbered property (the ones I have been involved with are either mortgage free or on commercial facilities)but I have been told a BTL mortgage may have restrictions on the type and term of a tenancy and I am not sure an R2R will comply with these restrictions, I am sure there are other about who are better qualified to comment.