Board warns about real estate clubs

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CONSUMERS have been warned to stay away from real estate investment clubs/schemes which the Real Estate Board said have been popping up across the island.

The caution was issued by Real Estate Board CEO Sandra Watson-Garrick who, in an interview with the Jamaica Observer, pointed out that it has come to her attention that a particular investment club is being advertised for increased membership. However, she said that type of investment is unsafe and is a sure risk.

“I would like to issue a warning to members of the public; those ones that speak to real estate investment, or making it an investment club of some sort, they are not protected by our Act, because we are protecting purchasers not investors,” she said.

“… So persons are really at risk, and this is the third time I am seeing it. In the two previous ones the people lost everything, and we couldn’t help them because what they invested in was not real estate; it was an investment company,” Watson-Garrick said.

She explained that these the real estate clubs/schemes are similar to Ponzi schemes as people invest in them with the hope of getting returns on the principal but are unable to get back their money.

The real estate board head recalled a similar scheme years ago in which a number of civil servants invested their monies but ended losing all.

She reiterated that there is no protection for people who participate in such a scheme, as even though it is being advertised as a real estate investment, people are really putting their money in a investment company.

“I just want members of the public to be careful not to park their money thinking that they’re going to get a speedy return. If it seems too good to be true, it is too good to be true,” Watson-Garrick warned.