For me 2014 was a great year – property had rebounded strongly after the Global Financial Crisis (GFC) of 2008/2009 and I was ready to jump into another project. After attending a few property seminars, I had found the next project, well two actually, because I liked them so much! 

They seemed exceptional: promoting sustainable living, community gardens, and architecturally designed by Fender Katsalidas. Contracts were signed and the $1000 holding deposits paid on each.

However, when the contracts arrived at my solicitor’s office, she called to advise that there would be additional charges as they were so lengthy. I had some questions of my own for the developers, so I advised my solicitor that I would read over the contracts myself first. They sure were lengthy! 

This was a fortunate move, as I now knew the details of the contracts inside out and allowed me to email off a series of questions¹ (click here to read corresponding emails) to the salesman. Nothing had been mentioned in the contract about the world renown designer and for me, this fact represented a fair proportion of the properties’ value, so I started to research and ask questions.  The response from Fender Katsalidis office was surprising, I was told they had only been engaged to do some marketing material for the sales company and nothing else. 

I was put off knowing that the developers most likely may end up using an architect that potentially isn’t world renowned; however, as there were many other aspects, I liked about the development I didn’t let this fact sway me.

The following week I was in talks again with the salesman and discussing the deposit. The salesman stated that they don’t accept Bank Bonds, but I knew the contract inside out and nowhere was this stated. I informed the salesman that legally he must accept bank bonds for both 20% deposits (totalling just over $190,000) as the contract does not state that you won’t.

I had all the facts and knew the contracts inside out after spending most of the weekend reading over them. I stood my ground on the matter and advised that the contract would be null and void if they did not accept bank bonds for the deposits, and I would request that my holding deposits be refunded. After a few heated conversations and a few weeks later, I was successful in finally getting back my holding deposits.

Fast forward to the summer of 2019, when a colleague of mine rang, calling to say that her and her partner were looking at some investment properties in Bendigo (regional Victoria) and asked if I knew much about the area. I didn’t have any properties in the area although was reminded of the contracts I had signed for back in 2014. I thought the sustainable living, community gardens and architecturally designed developments would be quite interesting for her to view.  “Right up your alley” I told her.  I could recall the estate and even the street name, which I rattled off to her, and said take a look. It’s now been 5 years, so the development will be finished and well worth a look, and I asked her to take some photos for my own interest. 

She called back within 30 minutes and said she was at the address I gave her, but she believes I gave her the wrong address. I assured her it was the right address, and then my phone beeped as she had sent a photo with the street sign, and a lot of vacant sandy land. “Impossible” I said! I quickly started researching the development and “boom” immediately I found page after page returned with ASIC rulings, court proceedings, news articles.  Titles like “Millions Lost” riddled the pages! 

It was a scam³ (Read the article here). I had almost lost 190k and for the last 5 years was none the wiser. Over 100 Million had been extorted from investors across three development sites. As read in the article above “Foscari was part of a network of land banking schemes into which mum and dad investors tipped as much as $100 million since 2010. The schemes are now being liquidated following a Federal Court ruling in April”.

The development called Foscari was located in Melbourne’s growth corridor in Truginina² , (read the article here) which in reality was an old tip, and the headlines were of the council saying that they would never grant building over that land. “A Kaye-linked business, Foscari Holdings, bought the property – which had been used as an illegal dump – for $3.3 million in 2012.”² recorded in the article here.

Another development called Hermitage on the outskirts in Bendigo⁴ (Read the article here) and a third called Veneziane in Melton⁴  (Read more) in Melbourne. All scams never intended to be built!

 

The lesson?
Do your research, diligently.  Had they excepted my bank bonds, then eventually I would have received my money back, all be it 5 years later. Unfortunately, for all those other investors though, their money is now long gone.