A stately home has remained derelict despite investors paying millions for luxury retirement apartments.
Windlestone Hall, near Bishop Auckland, County Durham, was bought by developer Carlauren for £850,000 in 2017.
It planned to turn it into a luxury care home and investors from around the world bought into the project.
It was due to open in a few months but work has stopped and the income paid out to investors has dried up.
Carlauren promised to turn the Grade II-listed building into a care home offering residents a “high quality country house hotel experience”.
Investors came from all over the world on a promise of a regular income that would be paid for from care home residents’ fees.
Land registry records showed they came from London, across Europe, Africa, India, China and the Far East, and ranged from a Saudi Princess to a Wiltshire pensioner.
Windlestone Hall history
- Built in 1835 to a design by English architect and surveyor Ignatius Bonomi
- Birthplace in 1897 of Anthony Eden, who served as prime minister from 1955 to 1957
- Used as a prisoner of war camp during World War Two
- From 1957 and 2006 was a local authority residential special school
- In 2011 the council sold it to property developer William Davenport for the controversially low price of £240,000
- Council further criticised when it was put back on the market in 2014 with a £2.5m price tag
- William Davenport was jailed in 2016 for making fraudulent loan and mortgage applications to buy the property, which was then repossessed by the bank
- In 2017 Windlestone Hall was bought by developer Carlauren
The BBC Inside Out programme found 53 units were sold with a total value of £8.5m.
Income was paid out monthly, even though the property was still derelict, with no care home facilities or residents.
The first investors knew about this was when payments dried up in the spring.
South African businessman Bertus Van Jaarsveld paid £164,000 for one unit.
He told the BBC: “Up until [the money stopped] I had no reason to dig into the company or look any deeper.
“Now that it’s all come to light you can see that they’ve been selling more rooms than they actually have in the property.
“And the way that the money wasn’t used for renovations… obviously that’s when I realised it wasn’t being managed the way it should be.”
‘Lucky to get 10%’
Inside Out also found the same company bought Highnam, a former care home in Hartlepool that closed after being declared unsafe.
Despite there being no planning permission or works carried out, 30 luxury care units in the 25-bed facility were sold for a total of £2.5m.
Walter Funk, an investor from South Africa, said his payments stopped “about six months ago”.
“In the emails they apologised saying there has been a delay in payments”, he said.
“But then there was no reply to the email I responded to, and I thought ‘oh oh’.”
He said he thought he would be “lucky” if he got back 10% of the £250,000 he was owed.
Carlauren sold units at another 23 similar properties in the UK – all pitched to investors as care homes or hotels.
They have resulted in a total of £76m of investors’ cash, but not a single one is operating as a care home.
Later this month administrators representing many of Carlauren’s investors are going to court in a bid to claw back some of their missing money.
The company’s owner and chief executive Sean Murray lives on the south coast, has a luxury yacht and a fleet of high-performance cars and until recently travelled in his own private jet, with most of those listed as company assets.
He has written to investors recently saying no money has gone missing.
Despite repeated requests from Inside Out he declined to be interviewed, but said in a statement he could not comment before the upcoming court action.
However, he did say “Windlestone Hall is and always will be top of our plans”, but said nothing could happen until legal action was complete.
You can see more on this story on Inside Out on BBC One in the North East and Cumbria at 19:30 BST on Monday 14 October, at the same time nationally on BBC One HD and afterwards on the iPlayer.