Administrators reveal bleak conditions at Trafford Press

TENANTS have been living at FreshStart’s Trafford Press apartment scheme without mains electricity or a permanent water supply.

Meanwhile, administrators have retained Irwin Mitchell to look into a £5m professional negligence claim against an unnamed law firm that was handling sales contracts for the flats at the development.

Conditions at the completed part of the stalled development in Manchester are revealed in a report by administrator Leonard Curtis into the collapse of FSL Properties Trafford Press, the FreshStart division which owned the site.

The report also details inadequate fire and safety measures, exposed electrical wiring, “severe problems” with the roof, defective window frames and no building regulations approvals for common areas.

The report said: “Given the severity of these issues, the decision was taken to try and obtain immediate vacant possesion of the site and to then commence further investigation works and recover various records relating to the planned development and any potential claims there may be against third parties involved in the development.”

There were 22 tenants when Leonard Curtis was appointed in September but the entire 116-apartment scheme had been pre-sold leaving many investors who had paid deposits out of pocket.

Manchester-based FreshStart launched a number of schemes across the country several years ago, marketing them cheaply to buy-to-let investors and promising good returns. Many were advertised as “student pods” – a student room for under £30,000 with guaranteed rental income for several years.

TheBusinessDesk.com has previously reported on problems at other Freshstart schemes, with the fire service intervening on safety grounds in Bradford, Stockport and Paisley in Scotland. Disgruntled investors have also taken legal action against the company over the failure to return deposits at schemes where work did not start, or was never completed.

FreshStart’s chief executive Charlie Cunningham told TheBusinessDesk.com in September that the root cause of the group’s problems stemmed from issues with the Trafford Press, and claimed a law firm had made mistakes with contracts that led to sales falling through. He said this caused funding problems and drained cash from the parent company, Empirical Property Group, which put £1.3m into the Trafford scheme.

Leonard Curtis’s report said the case is in its “early stages” and proceedings have not yet been issued. The claim is expected to be for the return of £18,000 in fees, the return of “deposits wrongly paid to the company”, loss of profits, and loss of chance. According to the report there is a “strong chance” of 88 of the deposits being repaid.

Trafford Press was funded by London-based lender SKPB Services which is owed £1.4m. It was expected to put more in but withheld finance when sales failed to complete. Because of the state of the site administrators only expect to raise £700,000 from a sale.

The development was a high profile FreshStart scheme which involved converting the former buildings of the Veno drug company and the Trafford Press on Chester Road. It was to consist of five old and new buildings. The original two buildings were renovated but when work stalled in January only steel frames had been erected for the third and fourth buildings.

* Trafford Press and FreshStart’s scheme at Mac Court in Stockport were the subject of an investigation by the BBC’s One Show last night. Mr Cunningham told Angela Rippon, “The fact it’s gone wrong is frustrating and I’m doing everything I can to sort it out”. He did not respond to an invitation by TheBusinessDesk.com to comment on the Leonard Curtis report.