The Secretary of State for Trade and Industry has presented petitions in the High Court to wind up Townfield Land Investments Limited ("Townfield") and Libertas Land Limited ("Libertas") in the public interest. Townfield carried on business as a land banking company selling plots of farmland, whilst Libertas provided marketing, sales and administration services for land being sold by land banking companies.

The petitions to wind up the companies were presented following an investigation carried out by Companies Investigation Branch under section 447 of the Companies Act 1985 (as amended).

(Via Government News Network. To read the full story, click here)

A company marketing plots of land on behalf of a "land-bank" business has been wound-up by the High Court in Manchester following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

From August 2005 to July 2006, Actionjack Limited, using the trading style "English Land Partnerships" (ELP), carried out a telesales campaign recruiting private individuals to a scheme in which parcels of land were purchased for investment purposes. ELP is described in promotional literature as a land bank business aimed at identifying and securing prime undeveloped land before planning consent is granted. The land is then divided into smaller plots and sold to private individuals with a view to planning permission for the whole site being obtained. Investors were recruited on the basis that the value of a site may increase tenfold if planning permission was obtained.

CIB's investigation found that the company had been offering investment advice to the public despite Actionjack and its sales staff having had no previous experience or qualifications to advise members of the public on purchasing land as an investment.

(Via Government News Network. To read the full story, click here)

Braintree District Council is advising people to exercise caution before buying land through internet "landbanking" schemes. These schemes offer plots of land for sale with promises of huge profits for buyers when the land gets planning permission for development, but there is no realistic prospect of permission being granted for development in the foreseeable future.

A BBC "Inside Out" investigation found that the websites often provide inaccurate and misleading information about the local area and the likelihood of the land being developed, investors are convinced into paying over the odds for sites that have little or no development potential, paying very high prices for land of little value.

Via Braintree District Council. To read the full story, click here
See also Braintree District Council statement on Sible Hedingham (PDF link)

As PropertySCAM continues to grow, more and more people are posting comments here seeking to join forces with others who have bought land plots.

Recognising this, and because the PropertySCAM site itself was designed primarily to inform readers and not as an interactive, self-help portal, we have created a new Google Groups site which plot owners may use to talk to each other, to compare notes and develop strategies for managing or exiting their land plot investments.

The new group is called Plot Owners and is open to anyone to join.

Subscribe to Plot Owners

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Visit this group

Please feel free to give the group a try, or post a comment here if you have any suggestion on how it might be improved.

The Office of Fair Trading came under pressure today to investigate firms that 'scam' consumers into buying small plots of rural land on the promise of high returns.

The watchdog received a formal request from Liberal Democrat MP Greg Mulholland to launch a probe into landbanking - a practice which campaigners say rips off investors while carving up the countryside.

Landbankers offer clients small strips of land under the pretext that they will see the value of their investment multiply once planning permission is granted to build houses.

But in reality, consumers are often left counting the cost as permission to build never materialises and they are lumbered with a small slice of land which they have paid well over the odds for.

(Via ThisisMoney.co.uk. To read the full story, click here)

A number of land banking companies have now been closed down by FSA/DTI action, having been found to be operating illegal collective investment schemes. Other land banking companies are currently being investigated by the FSA.

This leaves many plot owners in a very uncertain position. Are they entitled to any refund or compensation? Who will pay it?

The FSA has already issued guidance which says that land plot investors may have a statutory right to recover money and claim compensation for any consequent losses where illegal collective investment schemes have been in operation.

But plot owners may have difficulty in getting any money back from land banking companies even where liability can clearly be established because there may be insufficient collateral left after winding up these companies to pay any dividend.

However, it may be possible to claim against credit card companies where deposits on land plots were paid by credit card. This is because, should contracts for plot purchases be shown to be illegal, the credit card companies could be liable to refund investors under section 75 of the Consumer Credit Act 1974 since they have effectively lent money to investors to enter into these illegal contracts.

If you are resident in the UK, are the owner of a plot bought from one of the companies which has been closed by the FSA or is being investigated currently and you can demonstrate that you paid a deposit on your plot by a credit card issued by a UK bank, please leave a comment below including a working email address.

We'll try to put you in touch with someone who will be able to explore your options for you.