LEGAL ALERT: VACANT LOT SCAMS
We recently learned from The Fund® that the volume of scams involving vacant lots is on the rise again. For tips on how to avoid falling victim to vacant lot scams, visit The Fund®’s website. Remember, you should always exercise caution in closing transactions where you do not personally know the seller or where the seller is executing a deed outside of your presence.
WHAT ARE FAKE SELLER SCAMS?
Someone posing as the owner of a property tries to get a listing, a contract, and a closing where they can steal funds for a property they do not own. They usually supply fraudulent identification and will typically use the internet and telephone to close the transaction. If they are identifying themselves as authorized representatives of companies that own the property, they tend to use fake emails instead of corporate emails and will try to sign listing agreements with the name of the company rather than the name of the individual who is authorized to represent the company to avoid getting caught.
WHAT ARE VACANT LOT SCAMS?
This is a form of a fake seller scam. Typically, the victims of fraud live outside the United States and own vacant properties without mortgages. Often, the properties are owned by LLCs. A “seller” will reach out to a real estate agent to list “their” property, or they will identify themselves as authorized representatives of the companies or corporations that actually do own the land. They will usually want to rush a deal and will generally not meet with their agents in person.
HOW TO AVOID GETTING SCAMMED:
- Do your due diligence as soon as possible.
- Independently verify whether there is a mortgage.
- If you are considering skipping title insurance, consult with an attorney first to fully evaluate the risk.
- Check the local property appraiser’s website to see whether the individual or entity claiming to own the property actually does own it. If you see that there were “errors” in recording the deed, but the seller is assuring you it was just a mistake, this should be a big red flag.
- Contact the true owner to verify they are actually selling the property, the price, and to whom. Do not rely on the contact information you were given – talk to the neighbors, search online for additional contact information (phone, email, social media, addresses). Consider sending a letter, with tracking and delivery receipt, to the true owner. That said, be mindful of your obligations under the Code of Ethics.
- If you are working with a buyer and the seller is working with an agent, talk to the listing agent. Ask whether they know the seller personally, and if not, ask how they met and how they have been communicating. If all communications have been by email without any prior relationship, be on alert.
- This article by The Fund® provides examples of real scams and advice on how to verify the true owner and their intentions to sell.
- Be alert when documents are signed outside your presence. Remember, you should always exercise caution in closing transactions where you do not personally know the seller or where the seller is executing a deed outside of your presence. If the seller executes and notarizes documents abroad outside of your presence and sends them to your office via an international postal service, be on high alert.
- Carefully review all signatures. Cross-reference signatures with government-issued documents. Verify that passports are valid with government authorities. Get a second form of identification.
- Consider using RONs. If the seller insists on a remote closing, but refuses to use a Remote Online Notary, it might raise a red flag.
- Check for forged notary blocks.Notary stamps should clearly display the name of the notary, their commission number, and the date their commission expires. Verify the notary through the relevant government agency. Be on high alert of any of the notaries that The Fund® has flagged are listed on closing documents or deeds, as it might indicate a forged notary block.
- Proceeds should only be disbursed to the person in title. Make sure you consult with the title company and an attorney if you think the situation merits an exception.
WHAT TO DO IF YOU SUSPECT A REAL ESTATE SCAM
- Contact law enforcement ASAP – local, county, and the FBI. If the property is located in a municipality, then first contact local law enforcement. Take that case number to the county law enforcement, where applicable, so they are also aware of the issue. See the “Resources” section below on who to contact.
- Email the MIAMI MLS at email@example.com with as much detail as possible (listing number, individuals involved, details about the transaction).
- Watch the webinar we hosted on February 16, 2023, and review the slides
- U.S. Consumer Financial Protection Bureau
- Report fake rental listings to the Federal Trade Commission
- Report real estate scams to law enforcement:
- FBI Internet Crime Complaint Center (IC3)
- Miami-Dade County
- Miami-Dade County Police Department
- State Attorney’s Office, Economic Crimes Unit
- Broward Sheriff’s Office, Economic Crimes Unit
- Palm Beach County Sheriff’s Office, Financial Crimes Unit
- Martin County Sheriff’s Office, Organized Crime Unit
- Lucie County Sheriff’s Office, Economic Crimes Unit
- Florida Realtors Legal Hotline, 407.438.1409
This resource page is meant to provide education and information on relevant legal topics facing the industry and is not a substitute for legal advice. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user, or browser. MIAMI REALTORS® does not recommend or endorse the contents of third-party sites. For legal advice or representation, contact private counsel or call the Florida REALTORS® Legal Hotline (1-407-438-1409). The information and materials on MIAMI REALTORS®’ website are provided for educational and informational purposes only and should not be construed as legal advice or as an offer to perform legal services on any subject matter. It contains general information and may not reflect current legal developments or information. Nothing is intended to create an attorney-client relationship and shall not be construed as legal advice. The information is not guaranteed to be correct, complete, current, or suitable. MIAMI REALTORS® makes no warranty, expressed or implied, about the accuracy or reliability of the information in this program or materials. Recipients of the information in this program or materials should not act or refrain from acting on the basis of any information without seeking appropriate legal advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. MIAMI REALTORS® expressly disclaims all liability with respect to actions taken or not taken by the recipient based on any or all of the information in this information and materials.