A real estate scam with little alternative for victims

Aug 17, 2014 News

---

By Leonard Gildarie
The housing sector is so wide and diverse that one can easily find something to write about at the drop of a hat. We have spoken and written extensively about the acquisition of a house lot, applying for a mortgage, searching for a reliable contractor, and tips to avoid being scammed.
One of the areas we have discussed in detail is preparing yourself to sell your home. What is involved in this process?
We have over time been receiving many comments and emails from our readers, with many of them clueless about the systems. The lawyers and even some banks either did not volunteer enough information or have not been advising their clients about what to look out for.
What do I mean? Too often I have found in research that too much emphasis is being placed on the process applying for a mortgage, with the client being advised that probably the biggest challenge is how to spend the money wisely.
In the rush to get things done at the urgings of the contractor, caution is thrown to the wind, and the budget to build that home is stretched thin. I can’t blame the owners. Most of them have never handled that much money before and it is a problem.
Last week, I received a complaint from someone who attempted to buy a property and ended up in court.
The purchase of a property is a legal transaction that should from its inception involve a lawyer. It includes the drawing up of agreements between the buyer and seller. It would also involve checks to ensure that the property in question is clear from encumbrances and does not have a mortgage or is in litigation.
According to one of our readers, she got married last year and was not immediately planning to buy or build a home. That all changed when the young couple saw an advertisement by a real estate agency in the newspaper for a property.
She visited that real estate establishment and after viewing the property entered into an agreement about a week later. Some $2.5M was paid over as a deposit.
The couple took a lawyer who cleared the transaction. However, the transport was never handed over, and the stipulated agreement period soon expired.
After much back and forth, the couple discovered that the actual seller of the home may have been the wife of the real estate agent. This was revealed after calls were made to a phone and she answered.
There was a problem with that transport and of course, the real estate agency could not effect the transfer. The matter went to court and the wife of the real estate agent was given until June of this year to repay the deposit.
According to the reader, the problem was that although there was a judgment, the couple found that they could not get back their money. There were no assets in the name of the wife of the real estate agent.
The couple said that their lawyer told them that the next step would be liquidation of the assets of the seller.
“We are currently trying to ascertain what assets are in the seller’s name, if any, and were advised by our lawyer that neither the court nor she can assist in this process. Here we are faced with a situation where no institution will divulge such information and we are told by our lawyer that there is nothing more that the court can do for us.”
The couple even turned to the police, who informed that it is a civil matter and one for the courts.
“At this point, we are very frustrated and have no idea where to turn. We cannot afford another lawyer, but what would be the point if there is nothing more the court can do?”
I am no lawyer and will of course have to seek some advice on what went wrong here. I told the couple that they should have fired the lawyer who advised them. This should never have happened if the proper checks were done by the lawyer. That much I know.
Secondly, I am not sure what went wrong here but surely procedures were not followed. The checks and balances to ensure that the couple was not exposed up to the point where the $2.5M was handed over should never have happened, period!
I believe that this matter is tantamount to fraud and should be treated as such, as there seems to have been a deliberate ploy to fool the couple.
Another important point here is that there seems to be little monitoring on the operations of real estate agencies. Is there an existing association that could sanction a member who is engaged in questionable transactions?
We will be looking a little more into this issue. In the meantime, schools will be re-opening in a few weeks. The shopping has started in earnest. Be safe and continue to enjoy the vacation.
Please don’t forget to send those comments to [email protected] or call 2258491 or 6821256 weekdays.

---

---