KEY POINTS:
Blue Chip investors left holding sale and purchase agreements on apartments they have no way of affording are grouping together in the hopes of taking legal action.
The investors put their money into Blue Chip 'Premium Investment Products' or 'PIPs', unusual, high-risk products that have turned sour after 20 Blue Chip-related companies failed.
The products worked in this way: Investors put down a 10 per cent deposit on an apartment yet to be built. They had a sale and purchase agreement with the developer to buy the property when it was completed, but also had an agreement with Blue Chip Premium Income (not in liquidation) that it would buy the apartment just before completion.
In the meantime Blue Chip paid the investor a 16 per cent 'option fee' for the use of their money. In theory the investor would get an income without having to own a property.
But since the liquidations investors have been left liable for buying the properties. Solicitor Daniel Grove said the PIP investors did not believe they could end up being property owners.
Grove, who is helping PIP investors for free, intends to contact them soon asking for instructions to act for them.
Grove said if investors couldn't settle on a property the developers had the right to take their deposit, resell the property, and sue the investor for any costs incurred.
