Investing in property and lending to companies can be very rewarding, but it involves the following key risks:
Property prices can go down as well as up and different property types or those in different areas may be more or less susceptible to reduced or negative growth. By lending in property through CrowdProperty, your capital is at risk and there is a risk that you may not get back what you put in. You should not invest more money through the platform than you can afford to lose without altering your standard of living. Lending through CrowdProperty is not covered by the Financial Services Compensation Scheme.
Repayment of loans is not a certainty, and from time to time borrowers may default. Whilst we have a robust risk process to assess the project and the borrower before offering up the opportunity in order to mitigate the risk of default, unexpected things can happen. It is CrowdProperty’s policy to always secure a first legal charge against the property to protect lenders if default does occur. However, this does not completely remove the risk inherent in lending. You may not receive all your capital back and the process is likely to be very lengthy.
If CrowdProperty, as platform operator, were to cease trading, there would be risk that we would no longer be able to manage borrower repayments on lenders’ behalf. We have taken the followings steps to mitigate this risk:
The Company will employ Solicitors Client Accounts to segregate their customers’ funds from the Company’s own funds and Company assets, in a segregated bank account which is designated in such a way as to show that it is an account which is held for the purpose holding those funds.
Should the firm be made insolvent arrangements have been made for a third party to take over the administration of the loans to ensure an orderly repayment of interest and capital.
Any investment you make through the platform will be highly illiquid. There is no active secondary market for the shares of the investee company. This means that you are unlikely to be able to sell your shares until and unless the investee company is sold or the property is sold at the end of the investment term.
You will be responsible for the payment of your own tax which may include capital gains and/or income tax. We do not provide tax advice and you should seek independent tax advice before investing if you are unsure of your position. It is still your responsibility to ensure that your tax return is correct and is filed by the deadline and any tax owing is paid on time. If you are unsure how this investment will affect your tax status you must seek professional advice before you invest.
The value of property may go down as well as up and you may not get back the full amount you invested. You should not consider investing unless you can afford a total loss of your investment. Past performance is not a reliable indicator of future results.
Any projections of future performance are based on the internal calculations and opinions of CrowdProperty and are subject to change at any time. Forecasts are not a reliable indicator of future results and should not be relied on.
CrowdProperty do not offer any advice to lenders or borrowers. We recommend that if you are not sure about anything you should seek independent third party advice. We recommend that you do your own due diligence on any project before you decide if you want to lend.