What is Landbanking?
“A landbanking scam involves the selling of plots of land which are usually worthless or very low in value, often using high pressure selling techniques, to members of the public as potentially high return investments.
Victims are often led to believe that the land is likely to be developed for housing in the near future and there will be rapid, high level return on their investment once planning permission is granted.
In reality there is virtually no prospect of planning permission being granted and the investment is worthless.
The land is frequently agricultural land or land which is in an area of outstanding natural beauty, and is not likely to ever be built on.
In some cases, the land never existed in the first place or there was more than one company selling the same piece of land …” The Insolvency Service
How Can We Help?
We have recently been approached by several people seeking advice upon investment in land banking schemes. In some cases some people have already handed over vast amounts of money under severe pressure from aggressive salesmen.
Land banking usually involves an agricultural plot of land being acquired by a land banking company and then divided up into several plots and sold individually to unsuspecting members of the public with the promise of high investment returns in the future.
Invariably, the agricultural land will have little or no chance of obtaining planning permission in the near future and is often contained within green belt land. Further more with each plot being owned individually it is highly unlikely that a builder / developer would be willing to negotiate with several different owners for a deal to develop the entirety of the land as a housing estate. This would be exceptionally time consuming and expensive for any developer.
The buyers are often elderly and vulnerable and can be subjected to daily and aggressive telephone calls and the bombardment of literature exaggerating the viability of the investment in the land. This can cause much distress and anguish to families.
Land banking companies will do their utmost to procure thousands of pounds out of buyers before providing the legal documentation to the buyer and will then make it extremely difficult to get the money back. In most cases the land banking company will completely vanish and it is impossible to claim any recompense from them.
If you are contacted by any such land banking company you are strongly advised to hang up and not engage in any conversation whatsoever. If you have already started the ball rolling with an acquisition however you should seek legal advice upon the viability of the investment and the prospects of actually having the land developed into a housing estate. You should not hand over any money whatsoever until you have spoken to a solicitor.
If on the other hand you have already handed over some money and you have received some legal paperwork you are strongly recommended to present these to your solicitor for advice. The Land Banking Company will play down your need to visit a solicitor and you should ignore them.
Here at MKB Solicitors we are able to advise you on the legal paperwork and if you have handed over any monies we can look for ways to claim the money back or try to register your interest at the Land Registry and give you some sort of protection.
Please contact Mr Sam Price of our Property Department for help and assistance on 01226 215220.Sam Price Property Department