Life Lessons in Luck
A Reflection from Ryve Property Founder Ryan Vear
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.
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.
- Ryan Vear’s email questions from 2014 (PDF)
- Schneiders, B., Millar, R. and Johanson, S., 2016. Central Equity Swoops On Henry Kaye Property As Land Banking Scam Implodes. [online] The Sydney Morning Herald. Available at: <https://www.smh.com.au/business/companies/central-equity-swoops-on-henry-kayes-masterpiece-site-20161011-grzh3t.html> [Accessed 12 August 2020].
- Johanson, S., Millar, R. and Schneiders, B., 2016. Failed Bendigo Land Bank Linked To Property Spruiker Jamie Mcintyre On The Market. [online] The Sydney Morning Herald. Available at: <https://www.smh.com.au/business/companies/failed-bendigo-land-bank-linked-to-property-spruiker-jamie-mcintyre-on-the-market-20160503-goklyh.html> [Accessed 13 August 2020].
- Staff Reporter, 2018. $15 Million Land Banking Schemes, Hermitage Bendigo And Veneziane To Be Wound Up. [online] Propertyobserver.com.au. Available at: <https://www.propertyobserver.com.au/forward-planning/investment-strategy/property-news-and-insights/87294-15-million-land-banking-schemes-hermitage-bendigo-and-veneziane-to-be-wound-up.html> [Accessed 13 August 2020].
- Agostino, E., 2018. Court Orders Companies Involved In Land Banking Schemes Be Wound Up. [online] Bendigo Advertiser. Available at: <https://www.bendigoadvertiser.com.au/story/5555346/court-orders-companies-involved-in-land-banking-schemes-be-wound-up/> [Accessed 13 August 2020].
- Johanson, S., Millar, R. and Schneiders, B., 2016. Judge Lifts Lid On Henry Kaye’s Secret Windfall From Land Bank Scam. [online] The Sydney Morning Herald. Available at: <https://www.smh.com.au/national/henry-kaye-charged-60-interest-on-1m-loan-to-failed-land-banking-project-20160415-go798o.html> [Accessed 13 August 2020].
- Ferguson, A. and Johanson, S., 2011. Investors Beware: Lax Laws Let Spruikers Loose. [online] The Sydney Morning Herald. Available at: <https://www.smh.com.au/business/investors-beware-lax-laws-let-spruikers-loose-20110812-1ir2d.html> [Accessed 13 August 2020].
- Johanson, S., 2019. Land-Banking Scam Ends Up In Supreme Court. [online] The Sydney Morning Herald. Available at: <https://www.smh.com.au/business/companies/land-banking-scam-ends-up-in-supreme-court-20190711-p52687.html> [Accessed 13 August 2020].
- Global 1 Events and Henry Kaye. 2015. Market First Group – Global 1 Events And Henry Kaye. [online] Available at: <https://global1henrykaye.wordpress.com/tag/market-first-group/> [Accessed 13 August 2020].
- Johanson, S., 2013. House ‘Idyll’ Just Barren Paddock. [online] The Age. Available at: <https://www.theage.com.au/national/victoria/house-idyll-just-barren-paddock-20130928-2ulab.html> [Accessed 13 August 2020].
- Johanson, S. and Ferguson, A., 2011. Delving Into The Dark Side Of Shadow Brokers. [online] The Sydney Morning Herald. Available at: <https://www.smh.com.au/business/delving-into-the-dark-side-of-shadow-brokers-20110812-1iqsz.html> [Accessed 13 August 2020].