Case Study: Property Developer

Resolving cash flow issues and protecting long-standing relationships.

The Background


Property Company


Mortgage Mis-Selling

JCLM was recently instructed by an SME property developer based in London with a complex complaint about the financial and mortgage advice he received from a regulated advisory firm, and its owner.

The complaint about the firm is essentially that it failed to secure suitable mortgage finance for our client and made misrepresentations in respect of the remaining lease tenure that would be acceptable to a lender on its panel.

Solution 1

When the loan application was ultimately rejected over lender concerns about security our client was forced into obtaining expensive bridging loan finance (without any suitable and competitive alternative finance being sought by the firm) and encouraged to increase its indebtedness by the firm through taking out additional expensive lending over prime London property. This London property was at the time competitively mortgaged and our client has now been forced to sell some elements of this portfolio with less equity available than otherwise would have been the case. Our client also has concerns over the size of commission the firm has received from various lenders as a driver for encouraging our client to over-leverage: commissions which have not been disclosed.

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JCLM Solicitors, man reviewing plans on laptop looking pensive.

Solution 2

While the complaint with the firm for breach of MCOB and FCA Principles and negligence/breach of fiduciary duty is ongoing the owner of the firm at the time our client was seeking to suitable finance offered to lend our client money himself in his own personal capacity. In doing so he sought by way of loan agreement to deprive our client of some of his rights pursuant to the Consumer Credit Act. 

Solution 3

We consider that it is unfair to seek to deprive our client of such rights (when the FCA now regulates consumer credit) and for an owner of a regulated firm to offer finance in his personal capacity (without any clear indication as to whether he had the necessary FCA permissions/authorisations to carry out lending activity in such capacity) is potentially against FCA rules and practices and- in any event- potentially constitutes a conflict of interest between himself and the regulated firm. The matter is presently subject to negotiation between the parties.

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I engaged with Jamie to assist me with my dispute. Matters had become circular and it felt as though I was becoming a little out of my depth with a legal process appearing inevitable. Jamie unselfishly encouraged me to keep dialogue going and armed me with a greater understanding around the law relating to my dispute. This resulted in far improved dialogue with the other party and an eventual settlement.

– Alex, from Stockport

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