A few months ago, a colleague of mine took the bold step to purchase a property in North West London. I say bold because this was no ordinary property, it was a place of worship.
The property had been repossessed, and was due to be sold in the auction. It was due to be sold a couple of months before but was withdrawn prior, such is the nature of repossessions.
The deal was done prior to the auction, for around three quarters of a million. Considering freehold properties in this location go for around £650K, this was a lot of property for this amount of money; one could fit three if not four houses on this plot.
There was no firm plan for the property, the deal was done the last quarter of last year, when the auction market in particular was very hot. Thus what prompted the decision to purchase was purely the amount of property for the price.
The property consists of about 5,000 sq. ft. and is spread over two floors. There is lapsed planning for a third floor, which should be easy to resurrect.
I don’t think he appreciated at the time, the usage class is community use, which is very difficult to change for obvious reasons. The council wish to preserve any buildings which have this usage.
This investor took a leap of faith and exchanged on the deal prior to it going to auction.
Normally receivership sales do not sell prior to auction, as the receiver prefers to have the transparency of selling the lot in the room. However, given the property had been withdrawn from the last auction, the receiver I presume would have felt justified in doing the deal.
Once the property was exchanged on, the investor started to receive enquiries from various denominations and faiths, for well in excess of the money he paid. In fact, he was getting offers for nearly double the price paid.
It appears that there happens to be a huge demand for places of worship and very little supply. The reasons I assume these organisations could not buy from the auction were perhaps they simply did not know about the auction, or they would need time to have a whip round from the congregation, in order to raise the funds. Once it’s in the hands of a dealer, they can work together to execute the deal in a suitable time frame.
One organisation who wants the site has a turnover of £6M per annum and also has the bank funding in place to execute the deal.
Whilst the onward sale was being negotiated, it seems the previous pastor seemed to think he still owned the building; his justification was the building had not yet been registered in the new buyer’s name.
It is not unusual for there to be a time lag from the time of completion to when the property is actually registered in the new buyer’s name. This is no basis to contest the ownership of an asset.
Anyhow, undeterred he managed to break into the building and even held a sermon in the property he didn’t own. It seems God’s laws truly do transcend the laws of man, in this pastor’s mind most certainly.
The investor was worried this would sabotage the onward sale, and so approached his solicitor. The response was a predictable £10,000 fee and to apply to the courts, bailiffs etc.
Some matters require a more hands on and practical approach. We decided to attend the property together to sort the issue out.
In a matter of a few hours we had resecured the building leaving a security team in occupation. Thus, saving a tidy sum, saving a huge amount of time, and more importantly protecting the onward sale.