Land banking companies divide land into smaller plots to sell it to investors on the basis that once it is available for development it will soar in value. However, the land is often in areas of natural beauty or historical interest, with little chance of it being built on.
The number of land banking schemes being reported to us has been rising as more people discover they have invested in a plot of land in a green belt, nature conservation, agricultural, brownfield or other protected areas.
Plots sold recently include one on a site of special scientific interest, one on a 45-degree slope and another without any access to it. Some plots are simply too small to build on.
We estimate land banking scams have cost UK , European and Asian investors as much as $800 m is past years.
How it works
The contact usually comes out of the blue, with most schemes cold-calling investors after taking their phone number from publicly available shareholder lists. But the high-pressure sales tactics can also come by email, post, word of mouth or at a seminar or exhibition.
Investors are told they will make big profits on small plots of land once planning permission is granted or development started.
But many plot-holders instead lose large sums of money as this permission is often not granted or even applied for, and they are left with a plot that is practically worthless.
While not all land banking schemes are a scam, it is often not made clear to investors that there are restrictions on the development of the land or that it is otherwise protected.
Where it is explained that planning permission still needs to be obtained, promoters of land banking schemes may offer to handle the application process. If this is the case we should be able to help, as explained below.
There are also follow-up scams where plot-holders are asked to pay more money to settle their holding once they realise they will never turn a profit.
Company’s to look out for:
TWO directors of land-banking firm Profitable Plots, who were jailed a total of 15 years for cheating investors, have had their appeals against their sentences dismissed by the High Court. See report in The Straits Times
Jardin Smith International
These are the new boys out there and we are getting many reports about this company and the scam they are hitting investors with. Full report to come soon.
Jardine Smith investors are connecting together and realising that as a mass of investors they have paid the equivalent of $330,000 to more than $1,000,000 SGD for an acre of agricultural GreenBelt Land. RICS valuation at current growth estimate a duration of more than 200 years before the land in question meets the original purchase price by these Singaporean victims.Tensions sore amongst the group when a town planning senior advisor from the Council has started returning enquiries clearly stating that there would need to be exceptional circumstances for the “Greenbelt” restriction to be lifted. He followed by stating in writing that land bank would never be considered as an exceptional circumstance. Shockingly, owners have also revealed that in some areas where land has been sold by this company, have been informed of a motorways being constructed directly through their land. No notice, no consideration or financial renumeration due to the junk status of the land in question. This notification coming from the UK authorities has left owners owning no more than the title and their name on the land registry.To date, the Green belt restrictions in some parts of the land owned by those duped into buying has been enforced for more than seventy (70) years with no plans either now or in the future to rescind the said laws currently being enforced. Local authorities in Singapore like the Investors Association have ramped up staff to enforce strict penalties for falsely representing future profits for Speculative investments. In particular land banking was mentioned by the Investors Association.