Too Good to be True?
With over 15 year’s experience in international real estate investment and CBI programmes here at La Vida we have occasionally lost clients to price discounting elsewhere. It can be new entrants, existing desperate players or genuinely good deals. However the too good to be true offers often stand out and sadly all we can do is warn clients and leave them to make their own decisions.
The recent corruption claims regarding certain agents participating in the St. Kitts citizenship programme have highlighted the dangers investors and potential applicants face when choosing agents to represent them, not only for this programme but others throughout the Caribbean, Europe and beyond.
In summary such issues appear to have been caused by at least four agents out of Dubai accused of selling citizenship below the prescribed limit and fraudulently amending documents. La Vida was aware of such discounted promotions back in the summer of 2018 as several prospective clients had brought it to our attention. “Can you match the quote we had for $113,000” we were asked repeatedly? At the time we could not see how such citizenship could be sold below the government prescribed limits. At this point it must be said the St. Kitts Citizenship Unit had no idea themselves, and it is only recently that the fraud has been exposed.
So while this may have been promoted by some agents as a cheaper investment route and could have appeared attractive to some applicant investors, it looks as though the story has yet to run its full course and there are lessons here for investors and agents alike who were dragged in. It goes something along the lines of “if it’s too good to be true it probably is”.
La Vida visited St. Kitts in 2018 and conducted our due diligence in selecting and physically inspecting the real estate investments we were confident in promoting. We also saw some that were progressing at a slow rate or had stopped altogether. Real Estate schemes we would not be comfortable in promoting ourselves. Ones where it appeared developers had raised significant sums but had little in the way of results to show to investors. Too good to be true again perhaps. But this isn’t just about St. Kitts. It applies to every programme using real estate investment as a route to citizenship. Investors rarely visit themselves and hence often rely on their agent. Unfortunately the agents rarely visit too, and most have little experience in real estate themselves.
Roll forward a few months and the St. Kitts police are now involved in a potential fraud investigation and the opposition party leader, former Prime Minister Dr Denzil Douglas, has promised when elected he will revoke the citizenship of any applicant found to have been illegally granted St Kitts and Nevis citizenship through investment.
St. Kitts is the oldest citizenship investment programme in the world and it’s unlikely to be derailed by a few bad actors. But the warning is there across all citizenship programmes. This is not the first time we have seen too good to be true investments. But do note that with all citizenship and residency programmes we are dealing with democratically elected governments. Any change in administration could bring reviews for citizenship acquired by investors through a cut price illegal route. Even though they were not aware of how that was obtainable at such a low price at the time. Stick to the rules of course, and choose an agent that does likewise, and there is no issue. Either now or in the future.
There are many professional and well established agents in this sector and there are clearly some bad players too. Our advice hasn’t changed and you need to do your due diligence. Choose your agent carefully and remember, “if it’s too good to be true then it probably is”.
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