Real estate agent rental scam exposed

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Two agents, one in Texas, and one in NY, allegedly involved

Most successful dirt lawyers have excellent working relationships with the real estate agents who assist their clients in buying, selling and leasing real estate. And most effective real estate agents prove themselves to be trustworthy in their business practices. Recently, two almost identical scams in remote states involved alleged real estate agents, according to a May 4 article in Housing Wire titled, “Two real estate agents caught behaving badly”, by Jacob Gaffney.

house sale fingers crossed

The first story is set in Missouri City, Texas, and was originally reported by the television station, KHOU 11 News. According to this story, police are investigating a woman purporting to be a real estate agent who approached John and Pamela Hall offering to sell their dream home located at the corner of Montego Bay and Palm Harbour. The Halls had already vacated the home, and the alleged real estate agent promised to sell the home quickly. Both homeowners signed the paperwork allowing the culprit to list their home.

Several days later, the Halls were called by someone interesting in renting their attractive waterfront home from a listing they saw on Craigslist. When the Halls investigated the Craigslist entry, they discovered that the alleged real estate agent had actually created fraudulent documents, including a power of attorney and a deed, to take title to their home in the name of an LLC. When the Halls drove by their property, they saw someone moving in! The new “tenant” reported that he had paid $5,000 up front to lease the home.

The television station attempted to find the real estate agent’s name in the records of The Texas Real Estate Commission, but no such agent was found. The culprit used different names in dealing with the Halls and the tenant, and, so far, has been successful in stealing $5,000. The scam has no doubt caused a great deal of inconvenience to the Halls, not to mention the potential expenditure of funds in the form of attorney’s fees necessary to straighten out the public records.

The second story took place in Hampton Bays, New York. Southhampton Town Police said they received two complaints in February involving an alleged real estate agent taking deposits for a rental home. The prospective tenants were told the home was not yet available when the respective move-in dates approached, and the home owners had no relationship with the real estate agent and never received rent. Additional victims came forward, and police arrested Melanie Williams, 54, in April, on three counts of fourth degree grand larceny and three counts of first degree scheme to defraud. Detectives say they believe there may be additional victims in this scheme.

The Russian proverb quoted by President Ronald Reagan seems to be good advice in any situation concerning a real estate agent, or any professional for that matter, who is not known personally. Tell your clients to trust but verify!

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Is your client in the market for timber?

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Here’s what you’ll need to know to get started

timber

It’s always good to start with the law. In South Carolina, the case is, believe it or not, a 1938 grand larceny case.* It turns out that stealing standing timber is not grand larceny because standing timber is considered to be a fixture. The proper charge would be trespass.

Once the timber is severed from the real estate, however, it can be the subject of a grand larceny charge. What happens, you ask, if the criminal himself severs the timber and carries it away in a continuous act? That, my friends, is grand larceny. Even the South Carolina Supreme Court suggested this distinction may be subtle and illogical.

Now that we have exhausted my knowledge of subtle and illogical criminal law, let’s look at a few things dirt lawyers can understand. We draw from this case the proposition that standing timber is real estate in South Carolina.

Timber, like all real estate, should be conveyed by a deed. A seller might also reserve timber in a deed of the real estate to a third party. This would be similar to reserving an easement or reserving mineral rights.

The definition of “land” in a title insurance policy would include the timber growing on the land because the fee simple title holder owns all the physical elements (the “bundle of rights”, as we learned in law school) of the land. To insure land where the timber has been reserved, an exception would be taken for the timber.

From time to time, a title insurance company may be asked to insure timber. Only standing timber is insurable. Downed, fallen or cut trees would become personal property and no longer insurable in a title insurance policy. It might be problematic to insure future growth, trees seeded after a conveyance and timber sold expressly as “perpetual”. Consult your title insurance company before you get down into those weeds, so to speak.

Be careful about access issues. Timber roads are notoriously tricky, so pay careful attention to the description and ownership of real estate where the road is located. Often, GPS descriptions may be used to describe timber roads. Your client must be able to access the timber legally. The deed should grant the rights to cut and transport timber as well as the right of access.

Be careful about survey issues. You will typically not insure the acreage, and you may, again, face the problem of only having a GPS description. You might be the bad guy who has to require a survey.

You will typically take exception to the rights of others to use the land, as well as the terms and conditions of the timber deed.

Finally, determine whether a separate tax bill exists for the timber in order to prorate the correct tax amount.

You will likely want to involve your friendly title insurance company underwriter early and often if you become involved in a timber transaction.

 

 * State v. Collins, 288 S.C. 338, 199 S.E. 303 (1938).