Risk Disclosures Notice
Before making an investment you should carefully study and consider the nature of the investment and take independent professional advice. In light of the risks involved, you should undertake transactions only if you understand the nature of the contractual relationship into which you are entering and the extent of your exposure to risk, keeping in mind your financial resources.
Before you invest with us, we are required to make an assessment of whether you have sufficient knowledge and experience to understand the risks of the investment. Any decision whether or not to invest is yours.
CrowdLords will provide you with factual market information as well as information about how the transaction will work and the potential risks involved. We are not able to confirm whether an investment is suitable for you and your circumstances. If you have any concerns about this, we recommend that you seek advice from a financial adviser regulated by the FCA.
Before making any investment it is important to understand the risks associated with it. All investments carry risk as well as the chance of reward and you may not receive the value of your investment back.
Investments made through CrowdLords are always in property investment, are made in conjunction with a LandLord (also known as “Managing Investor”) and are made through an unlisted company set up especially for each property (a “Special Purpose Vehicle”). Below are the key risks we have identified: The Special Purpose Vehicles into which you will invest through the website are mainly newly formed entities set up specifically for the purpose of investing in the property concerned. They therefore do not have a long-term track record that you can review.
The structure of investments will remain as per the agreement unless stated otherwise. If the structure varies for a particular property you will be able to review the terms and conditions with the rights attached to your investment.
Reliance on the LandLord
The LandLord who presents the property will be responsible for the day to day management of the site including maintenance and finding tenants. CrowdLords undertakes some due diligence on all LandLords including Know Your Customer, Anti Money Laundering and Debarred Officer checks but you may decide to undertake your own checks in addition.
Additionally the experience of the LandLords who use our site will vary. CrowdLords will include details on the website of a LandLord’s background so that you can judge for yourself whether you are happy with their level of experience. If you need any further information to satisfy yourself you will be able to ask the LandLord questions directly within the Q&A tab of the investment.
The companies through which you will make your property investments are not listed on an exchange and there is no obvious secondary market on which you could sell your shares. As a result you may not be able to get your capital back early if your circumstances change. You should carefully consider whether the term of the investment described is acceptable for you in light of this.
Conflicts of interest
The LandLord will adopt a Director role on the Board of the Special Purpose Vehicle along with an Independent Director appointed by CrowdLords. The Independent Director will have a presiding vote in respect of company business and will be paid a reasonable fee by the SPV.
The role of the Independent Director is to ensure the best interests of the Investors are met. They ensure the LandLord performs to their duties as per the Management Agreement. However, the LandLord will not need to run every decision or action past the Independent Director and we cannot guarantee the performance of the LandLord or that the LandLord puts the shareholders interests first.
CrowdLords will allow employees and contacts the opportunity to become LandLords and Investors. In these circumstances we will make it very clear to potential Investors the connection to CrowdLords so that they can decide whether they would like to partake. Employees and contacts will be treated in the same manner as other Investors or LandLords
Sources of information about the opportunity
Landlords provide CrowdLords with the information shown to you on the website. CrowdLords verifies information by visiting the property and checking third party commentary about the market value of the area. CrowdLords will use a RICS qualified surveyor to independently value the property and use market commentary from Savills. You may also wish to undertake your own checks, especially if there are other pieces of information, which will determine your decision to invest.
Investors should consider whether the LandLord’s offer sufficiently describes the various risks and any conflicts of interest relating to the property. Although we will provide guidance to the LandLords to assist them in preparing full and fair disclosure of all risks in their listing, it may not be possible for us to confirm that this is an exhaustive and accurately described list. Before making any investment or lending decisions, you should fully assess the risks involved and should query any matters where you feel inadequate risk disclosures have been made.
Investing in property carries certain risks and the Investors have to be satisfied that this risk is acceptable. CrowdLords offers no guarantees or assurances to any income, Capital Growth or other financial gain through the Property Investment Opportunities. Property prices and rental demand can go down as well as up. There is no guarantee of finding suitable tenants willing to pay the projected rental income. Interest rates can fluctuate. Property refurbishments and maintenance costs can cost more than estimated. Investors will need to take into consideration these risks before choosing to invest.
Prospective Investors should note that past performance should not be seen as an indication of future performance. The value of an investment and the income from it can fall as well as rise and Investors may not get back the amount originally invested. Therefore you should only make investment in unlisted companies which you can afford to lose without having any significant impact on your overall financial position or commitments. Taxation levels, bases and reliefs may change if the law changes and independent advice should be sought.
The tax you pay is your responsibility and will depend upon your individual circumstances. This may include capital gains or income tax and if you need advice on the impact of additional income or capital gains you should discuss this with an advisor prior to making an investment. Your investment is in an SPV. The taxable profit generated by the SPV is subject to corporation tax at 20% and will be paid as Dividends, after net of Corporation Tax and may be liable for Capital Gains tax.
Please note that the corporation tax may be subject to change.