Around 60 investors in projects led by the Elliot Group are "demanding answers" from the developer, saying they fear life savings may now be lost forever.
Dozens of people who have invested tens of thousands of pounds in Elliot Lawless' schemes in Liverpool, Manchester and further afield have formed the Elliot Group Investor Community on Facebook.
The "action group" consists of some investors in developments such as Aura and Infinity in Liverpool and the Residence in Manchester - - who fear losing everything, and others who are unhappy with returns from yields.
It comes after Mr Lawless in December on suspicion of fraud. He denies all allegations made against him.
The Elliot Group Investor Community began on the social media network last year, and said members now want to “find a solution to a situation that has left investors worldwide owed thousands of pounds”.
It was founded by Tim Russell, an investor in the Victoria House project in Leeds - a development containing 106 residential units.
Formed initially just for Victoria House investors, Mr Russell was soon contacted by people who had interests in various other projects, and had become “frustrated at the lack of communication” from the group.
Mr Russell said his property came with a guaranteed rental yield of 8%, and that its late completion date caused him “considerable financial problems”.
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But he said since the development completed, Elliot Group has “consistently refused” to pay out the guaranteed yield. Instead, he said, investors are either receiving just ‘live yield’ - the actual rental income minus management fees or “nothing at all”.
Mr Russell said: “Elliot Group invested millions in new developments in 2019 yet they won’t even honour their contracts with existing investors and pay them what they are owed.
“So we would like to know when the company will honour their legal agreements and pay investors - many of whom, like me, are small investors who rely on this additional source of income to cover expenses - what is rightfully ours.”
Responding to Mr Russell’s claims, an Elliot Group spokesman said work started “later than anticipated on Victoria House due to a mix of issues outside our control” - but that since it opened in February 2018, it has been a “great success”.
He said: “Our contract allowed any investor to recover their deposits and walk away should we miss a key deadline and Mr Russell will have been aware of this. He chose to stay with us and enjoyed the promised yields for the first year of the three year guaranteed yield period.”
Those yields began to fall due to a number of reasons, but are hoped to be restored to 8% by August, the spokesman said.
He added: “We have written to our investors to explain our proactive steps and informed them that we will extend the guaranteed yield period to cover the time of lower yields so that they secure the return they expected.
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“At the end of this extended period no-one should be out of pocket. In the meantime, of course, they are securing yields averaging 6%, which is considerably higher than many other asset classes.
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“Elliot Group has successfully completed more than 2,500 homes and on any one day around 97% of these are let.
“Our whole approach with investors is one of constant communication and they have been kept fully in the loop throughout where yield performance has not been where we would like it.
“Elliot Lawless has personally contacted all investors in Victoria House by telephone as part of the company’s open and transparent communications style.”
The spokesman for Elliot Group said the firm could not comment further on the schemes now in administration: Aura - a 1,000-unit student housing project in Islington and Infinity - a £250m, three-tower site on Leeds Street both in Liverpool, and The Residence - two luxury towers in Salford worth £70m.
Administrators for the projects, Paul Cooper and David Rubin of David Rubin & Partners, released a statement at the weekend saying they are “optimistic” the schemes will come off.
A statement released by Paul Cooper said: “I have spent time in both Liverpool and Manchester this week in order to get an overview of the situation regarding all three developments.
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“I am optimistic that David Rubin & Partners will be able to implement a rapid process to ensure these developments are able to be completed, providing both state of the art student and residential accommodation.
“There are multiple stakeholders here and our team will shortly be in contact with all relevant parties to provide an update and inform them of the next steps to be taken by the joint administrators.”
Both the group's owner Elliot Lawless and council regeneration chief Nick Kavanagh on suspicion of fraud.
Mr Kavanagh was arrested on suspicion of conspiracy to defraud and misconduct in a public office back in December with Mr Lawless, one of the city's leading property developers, also arrested on suspicion of conspiracy to defraud, bribery and corruption.
Mr Lawless denies all allegations against him, while Mr Kavanagh has not spoken publicly since his arrest.
Neither Mr Lawless nor the council official have been charged with any offence, with both subject to a continuing investigation by .
Last week, Mr Lawless launched a over his arrest and the search warrants used to enter his home and office.
He said that the police's case against him was “completely without foundation”.