There are many dangers when considering whether or not to invest in commercial property, risks involved include; market risk; product risk; lease lengths; tenants and many more. One risk that you may forget to consider is the validity of the seller.
A commercial property developer has been placed behind bars at Preston Crown Court yesterday, following a case in which he was said to have defrauded commercial property investors for the sum of £1.3 million.
Shaun Kiely, 43, was the director and shareholder of Sky Properties (Northern) Limited and S-Mart Stores Plc, a chain of small retail outlets across the UK including Morecambe. Kiely, from Rossendale, was found guilty of obtaining money transfers by deception and of false accounting.
Mr Kiely is said to have duped potential commercial property investors from as far back as 2005, by promoting the S-Mart stores as money-making businesses when in actual fact, very little trading was actually taking place.
The Serious Fraud Office has said Sky Properties Northern, purchased over 50 commercial retail properties across the UK and fashioned 20-year leases to S-Mart for the properties before selling on the freeholds at auction.
Obviously, the commercial properties were endorsed as a great potential investment opportunity, despite S-Mart not being a profitable organistation.
Following the trail in May of this year, Kiely was yesterday found guilty and sentenced to three years in prison and has also been disqualified from being a company director for the next seven years.
Director of the Serious Fraud Office, Richard Alderman says: ‘Shaun Kiely abused the trust of the people who invested in his business. They expected a return for their money, but all they got was worry and distress. I am very pleased that justice has now been served.’
This demonstrates just how important it is to carefully check everything with a fine tooth comb when considering investing in commercial property.
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