A HOUSEBUILDING firm in East Lothian has collapsed into administration, leaving a number of homes “part-complete”, with lawyers having to call in security to “gain access” to the site.
Salo Property Services Limited, based in Dunbar, fell into the hands of administrators last month, as The Herald first reported.
James Stephen and Lee Causer of BDO were appointed joint administrators and have since released a report outlining the company’s collapse.
Administrators outlined in their report that in the months leading to the company's collapse, its directors had approached their lenders for additional funding.
However, the lenders had “significant concerns” that the company had run out of funds to complete the development and had been requesting repayment of the loan for around two years.
“Without a clear indication of the costs to complete and a timeline to completion, the Lender became unwilling to allow interest to continue to accrue with no clear timeline to completion and repayment of the debt,” the administrators wrote.
“Given the concerns all these matters raised, the Lender took steps to place the Company into Administration.
“This would enable the site to be secured and for the Joint Administrators to undertake a full review of the Company's records and bank statements to ascertain how funds have been expended.”
A spokesperson for BDO confirmed to The Herald that the development consisted of three houses which will be put up for sale.
Administrators also outlined in their report that when they were first appointed to the company, they couldn’t contact the directors of Salo Property Services or any staff and that there was nobody present at the building site when they visited.
The report said: “While not initially answering, one of the directors did shortly call back and the position with the site and Administration process was explained.
“The director confirmed they were currently out of the country and would be returning shortly. My staff organised to meet the director the following Monday to gain access to the site, have initial discussions with the Directors and initiate a handover.
“On the agreed date, the director informed my staff that they would no longer be able to meet due to a family emergency, however my staff confirmed that as the initial meeting had already been delayed to allow them to return to the country, it could not be delayed further and steps would be taken to secure the site.
“My staff requested that our appointed security agent, Clearway, meet them on site so they could change locks and assess the security requirements. Clearway arrived on the site and proceeded with their security measures.
“Once my team arrived on site, they discovered that the director had become available to attend on short notice, so an initial discussion with the director to discuss the current position and explain the next steps was held. We have since been in contact with the director to obtain all necessary financial and logistical information of the Company, and most of this has been delivered. My team are following up on any outstanding information.”
The report added that a “competitive tender process” has been instructed for the selling agents and that a valuation of the site is being conducted.
“Despite the site not being on the market we have already received several notes of interest which will be passed to the selected property agent for their review and recommendations,” administrators said.
They confirmed that letters have been sent to all known creditors providing details of the Administration.
They added that the directors have confirmed the company had no employees at the time administrators were appointed to the firm.
