Fraud Alert: Foreign Cash Buyer

by Grant W. Kehres* | Posted 02/14/2010

Fraudulent “buyers” are out there, wasting the time of real estate agents and sellers, fishing for the opportunity to rip-off the real estate agent or title company escrow account. We just witnessed one of our colleagues nearly have his trust account fraudulently emptied by a “cash buyer.” The “buyer” contacted a local real estate agent by E-mail indicating that he was a Chinese businessman and wanted to buy a Florida vacation home. He said he saw the listing of a particular property on the Internet, that he liked what he saw and wanted to make a cash offer. After several E-mails back and forth, a contract was executed to purchase the property, sight unseen for $380,000.00. The contract provided for a $15,000.00 initial deposit and an additional $23,000.00 deposit to be made within 15 days of the Effective Date. As proof of funds to effect the transaction, the executed contract was accompanied by the “buyer’s” December bank statement from the Bank of China showing an opening balance of $2,500,000.50, an ending balance of $1,057,654.63, and an E-mail that read as follows:

fraud_alert

“Attached are scanned copies of the acknowledged document. As I have said before, the home will be a cash buy and I and my wife will fly to USA for viewing the property but before that I would like my stock broker in America to send the money to your firm via a lawyer/solicitor. I want to make the funds available in USA before coming to view the property, please I would want you to retain a lawyer for me so that my stock broker can send the funds directly to him to keep in a trust account until I arrive in USA with my wife. Please let me know the lawyer retaining fees and charges so that my stock broker can include all in the payment he would be sending to the lawyer. Kindly get back to me with a candid response as I plan to be in USA soon.”

Shortly after the lawyer was retained, the lawyer received an official looking check, complete with watermarks on security paper from a Canadian insurance company in the amount of $350,000.00 disbursed on the account of a numbered Canadian company and made payable to the attorney’s trust account. The check was counterfeit. The “buyer” was fake. The whole exercise was a monumental waste of time for the real estate agent and seller. The only good news is, there were enough warning signs that the lawyer refused to disburse on the counterfeit check, and the fraud was averted. This was the second “foreign cash buyer” scam that we’ve seen in the last six months. There are other types of scams going on. Our office is committed to providing our clients and the real estate agents that work with us the assistance and experience needed to help avoid being a victim of real estate fraud. Protect yourself, your family, your money and your time. You have the right to choose your counter party and your closing/title attorney. For your real estate closing needs, we invite you to tap into our 33 years of local real estate law knowledge and our real estate transaction experience; because your time and money are terrible things to waste.


*Grant Kehres is Board Certified by the Florida Bar Board of Legal Specialization as a Real Estate Law Specialist. He holds a doctorate in jurisprudence from Vanderbilt University, an MBA (finance) from Babson College and a dual undergraduate degree in investments and economics from Babson College. Admitted to The Florida Bar in 1978, he has handled nearly 10,000 closings for more than 6,000 clients. For more information on our services and what distinguishes our office from other law firms and title companies, call (561) 392-5200.

Posted 02-14-2010

Tenants and Foreclosure

by Grant W. Kehres* | Posted 11/01/2009

What happens to a tenant when a lender, condo association or HOA forecloses their mortgage or lien? Before Congress recently stepped in, the tenant would be subject to immediate eviction.

When Congress passed the Protecting Tenants at Foreclosure Act of 2009, it was trying to prevent the quick eviction of the nonowner tenant in connection with a foreclosure. The law is applicable to any foreclosure of a federally related mortgage loan or any residential property after the date of enactment of the Act.

The Act provides that the immediate successor in interest in the property will be subject to the rights of the tenant to remain in possession of the property, subject to certain limitations specified in the Act. The tenant under a bona fide lease will have the right to remain in possession pursuant to the lease to the end of the term of the lease, subject to the tenant’s rights being terminated with 90 days notice; or if no lease, subject to termination with 90 days notice.

A lease is considered bona fide only if the mortgagor or the child, spouse or parent of the mortgagor is not the tenant, the lease was an arm’s length transaction, and the lease requires rent that is not substantially less than fair market rent for the property. The Act applies to lenders and condominium/homeowner’s associations who foreclose their liens on the property.

There are many unanswered questions raised by the Act. It’s not clear when the 90-day notice must be given to the tenants. It’s not clear what happens if the tenant fails to pay rent or otherwise defaults under the lease. Stay tuned for further developments as the courts start to interpret this new law.


*Grant Kehres is Board Certified by the Florida Bar Board of Legal Specialization as a Real Estate Law Specialist. He holds a doctorate in jurisprudence from Vanderbilt University, an MBA (finance) from Babson College and a dual undergraduate degree in investments and economics from Babson College. Admitted to The Florida Bar in 1978, he has handled nearly 10,000 closings for more than 6,000 clients. For more information on our services and what distinguishes our office from other law firms and title companies, call (561) 392-5200.

Posted 11-01-2009

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BOCA RATON HOME PRICE INDEX DROPS 1.28% FOR APRIL

by Grant W. Kehres* | Posted 11/01/2009

Home prices in Boca Raton as measured by my Boca Raton Home Price Index dropped 46 points to 3535.50 from the March figure of 3581.50, a 1.28% decline for the month; and is off 43.8% from its peak of 6232.49 reached in April of 2006.

All ten categories in the index saw a decline, but high end condominiums on the beach saw the smallest decline averaging less than 0.3%, with lower end single family homes in the western part of the community showing the largest decreases averaging slightly more than 3.25%.

Starting in January of 2001, my Home Price Index for Boca Raton was developed to help our clients and real estate professionals monitor residential home prices in the community. The index reflects a statistical makeup of Boca Raton housing, tracking price changes in ten categories of homes, town homes and condominiums located in the various regions of the city from the swamp to the beach between the C-15 Canal and the Hillsboro Canal.

The Boca Raton Home Price Index should not be used as a substitute for the professional evaluation of a particular property. Each property is unique with a number of factors that influence valuation. If you have a question as to the value of your property or are thinking of buying or selling a home and require assistance in selecting a real estate agent, property inspector, appraiser, mortgage broker or other real estate professional, call our office. We routinely work with a number of highly qualified real estate professional. Allow us to refer you to the one that would best fit your particular needs.


*Grant Kehres is Board Certified by the Florida Bar Board of Legal Specialization as a Real Estate Law Specialist. He holds a doctorate in jurisprudence from Vanderbilt University, an MBA (finance) from Babson College and a dual undergraduate degree in investments and economics from Babson College. Admitted to The Florida Bar in 1978, he has handled nearly 10,000 closings for more than 6,000 clients. For more information on our services and what distinguishes our office from other law firms and title companies, call (561) 392-5200.

Posted 11-01-2009