Real Estate Fraud and Deceit

Real Estate Fraud and Deceit

Accountant · KY (kentucky) · Member since 2019 · 17 posts · 0 votes

My family was in a tenant in common situation at the cousins level now. We had a cousin sell his 1/8 interest to a firm that is a licensed real estate brokerage firm but also bills itself as a developer.

The local board of education made it clear that they were looking for land to build a new middle school and the identified our area as in the desired location.

They started the process by advertising an RFP. We didn’t respond because we could not get everyone to agree to list and because we can only see our interest then we couldn’t go into a contract to sell the property with the board. We just assumed if our area was identified then they would approach us for negotiations and take it from there.

Months and months passed and no contact so we assumed they chose another site. The firm made us an offer and the tenants accepted since we didn’t was to face a possible partition suit and the school never reached out.

Two months after we sold they announced that the school would go on our property.

I since did open records requests and found that the firm’s unlicensed president put the entire farm up for sale 3 weeks before the company took 1/8 title to the farm. They also were negotiating price despite not being full owner and even had the board of education sign a non disclosure agreement.

This sure seems like fraud, deceipt, unlicensed brokerage since the president is unlicensed and offering property for sale on others’ behalf without all owners’ consent and I assume the principal broker and managing broker could be looking at possible revocation for allowing this to occur.

Thoughts? Is this legal? I have been told that anyone can sell property as long as they get title before closing.

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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
6y

Whoever sold the 12.5% to the wolves screwed the family. 

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  • Accountant · KY (kentucky) · Member since 2019 · 17 posts · 0 votes
    6y

    @Russell Brazil so it says you are a real estate agent, if I want to sell a house that I don’t own, you would be willing to sign a listing agreement to sell that house? This firm was licensed. No difference right? What is ok for them would be ok for you right?

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    6y
    Originally posted by @Account Closed:

    @Russell Brazil so it says you are a real estate agent, if I want to sell a house that I don’t own, you would be willing to sign a listing agreement to sell that house? This firm was licensed. No difference right? What is ok for them would be ok for you right?

     Youve obviously come here looking for a particular answer. You obviously dont like the answers the professionals have given you, using only the information that you have provided. This happens literally every day on these forums. People come to vent with a very narrow view of their situation, they lay out the facts as they see them, then a bunch of unbiased people interpret that information often in the opposite manner that the offended person has come to. They seek out information on the internet that adds to their confirmation bias....but then get upset when someone actually says, no I think you got it wrong.

    The company/individual were acting within their own interests to buy and sell real estate. They were not a fiduciary to you. When they bought your property did they disclose to you their licensee status? Thats all the law requires, they can then resell their property to whomever they choose. If they believe they can buy a property for X and sell it for Y, they can line up a buyer for Y then attempt to buy it for C. This is done hundreds of thousands of times a year.

    It sounds more like you guys dropped the ball. You acted on assumptions (they arnt building a school here) and neglected to do proper due diligence. It sounds like you chose not to hire a professional to represent you in the transaction, who could have valued the property correctly.

  • Accountant · KY (kentucky) · Member since 2019 · 17 posts · 0 votes
    6y

    So since everyone here is professionals, please teach me.

    If I own a property as a tenant in common and all the tenants want to sell then we hire a real estate agent, all the owners will need to sign the listing agreement to satisfy the statute of frauds and authorize that person to offer the property on our behalf.

    However, I could just put the whole thing up for sale because I am an owner and I can just go behind everyone’s back without letting anyone know offer the property for sale and that is perfectly legal and fine. No need to get anyone’s consent...and because I am an owner, no matter how small, I am not committing an act of unlicensed brokerage because I am acting for myself and not others even if I am doing this to make a profit.

    That is what I am getting here. Using an agent, everyone has to agree to list. If I want to sell the whole thing by myself, it is fine if I just take control of everyone’s negotiating rights and offer it myself.

  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    6y

    Whoever sold the 12.5% to the wolves screwed the family. 

    Gimer Law516 Reviews
  • Accountant · KY (kentucky) · Member since 2019 · 17 posts · 0 votes
    6y

    @Tom Gimer Yes, he didnt even get paid when he sold. He conveyed and put a certain payment lien on the property.

    I am struggling with the rights of the co tenants. My assumption is that to market the entire property for sale the remaining tenants would need to agree since their interest is being marketed or the new owner would need to file a partition suit to force a sale.

  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    6y

    I highly doubt there is anything illegal about “offering a property for sale, that you own 1/8th of, subject to you acquiring full title”.  It is difficult to properly interpret the laws by us laymen, particularly when you have an inherent bias as to what you think is “fair”.....which is not the same thing as what is “legal”.

    You need to talk to a Local real estate attorney....their opinion will be much more on point with law than ours. 

  • Accountant · KY (kentucky) · Member since 2019 · 17 posts · 0 votes
    6y

    @Jay Hinrichs  I got a letter in the mail today...they have started an investigation of the real estate brokerage firm for possible licensing law violation.

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