Purchase property scam.

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My elderly friend wanted to sell her home, and signed a contract with someone to pay her $15,000 for it, with which she could pay off mortgage. He gave her $500 earnest money, but hasn't gone forward to close deal. In the contract, there was a paragraph that said if buyer spent up to $15,000 rehabbing the property, and sale didn't go through, that she would owe him that amount of money, He has done some work on property, and now says she owes him $14,000. (Not much has actually been done). I think this was just a scam to make her pay a lot of money for for work she didn't want, and there was no intention from the beginning for him to actually buy. She is over 80 years old, and this will wipe out what little she has. Any suggestions, or a lawyer you might recommend to assist?


She should go to the local police for starts and report this person. Ditto report him to the State Attorney General.

Call Legal Aid and see if they will take this on.
Let me see first if I understand the situation.

1. Issue: Your friend executed a contract to sell her home for $15,000, an incredibly low amount for any home. Is this home in very bad condition, a terrible neighborhood, or very small? Alternately, does your friend have some dementia? I'm finding it really incredible that anyone would want to sell for such a nominal amount.

Question: Who drafted the contract? I'm assuming it wasn't a standard realtor purchase agreement. What were the conditions upon which the transaction would close and the sale be consummated? What was the time frame for closing? Did your friend have any representation at all in the contract preparation? Or was it prepared by the alleged purchaser/rehabber?

2. Issue: "Rehabbing the property."

Question: What parameters were established for who determined what should be rehabbed? Was the purchaser allowed to just 'rehab" whatever he felt was appropriate? What was the time frame established, and was the rehab contingent on anything? Vice versa, was the closing contingent on the rehab?

Has he submitted statements, partial waivers of lien, invoices for materials, or what has he provided to document the alleged expenditures?

Were any permits pulled? Was your friend on the premises when the alleged work was performed?

3. The rehabber.

How was contact made? Did this person approach your friend? If so, with what kind of proposal? Did he provide any references, copy of insurance policy declarations with specific coverages listed?

(I'm breaking this post up because it's become so long, fraught with so many questions to be answered.)
If my assumptions are correct, the "seller" in question is a vulnerable elder who was preyed upon my a scam artist. GA ' S questions all need to be answered of course, but I would get the cops involved asap. This is fraud.
Part two:

4. Issue: Attempted fraud, with intention to commit fraud.

Question: where do I start? Did your friend do any background checks or research on this person? What is his alleged area of expertise? Is he licensed? Insured? What experience does he have? Was he recommend by anyone? Did he just show up out of the blue and make the suggestion of a contract for rehab as prefatory to sale of the property (suggesting to me that she was targeted.)?

5. Remedies.

First, contact the police to file a complaint. You might also contact Adult Protective Services; this may be out of the element of physical elder abuse, but it certainly seems like elder financial abuse.

Second, If the rehabber had any access to inside the house, put fraud alerts on her credit files with the credit reporting bureaus, or better yet security freezes on this woman's credit reports. If it appears as though checks or credit cards are missing, have her close the accounts and open new ones.
Check other important documents to ensure they're still there.

Third, be prepared.

Liens: There's no information in your profile or post on the state in which this occurred, so I'll speak only to what I know of this issue in my state.

Providers of certain property services have what used to be called "mechanic's lien" rights. That was changed sometime ago to "construction liens." Under certain conditions, and in compliance with specific statutory requirements, those who perform certain services in the construction field can file liens against the property. Those liens must be satisfied before the property can eventually be sold.

I suspect this "someone" will be filing a lien to (a) further intimidate your friend, and (b) block the sale to anyone without being paid for the alleged work. It's a manipulative trick, also designed to intimidate her into paying.

Prepare your friend for this to happen so it won't be as traumatic.

I agree with what GardenArtist had written above. I have a feeling someone came to your friends door saying he wanted to purchase the house and gave out a random number of $15k which is pretty low. I be curious what is the actual market value of the house.

As for the rehab work already done, were receipts presented, if so were the materials and labor of "reasonable" worth, or were the amounts way over the top?

Does your friend have any grown children or other family who can represent her as this could be complex, even for the average clear minded person. Have her consult an attorney.
Representations: Advise your friend not to communicate in any verbal manner with this person and don't pay anything. I expect intimidation will be a major element in his approach.

If she was trusting and allowed him access to the house, or gave him a key (as some reputable builders need if the homeowner won't be there), change the locks.

Legal Action: No one can recommend an attorney when you've provided no information on this woman's location.

There are also more than a few issues which can cross legal practice lines. The fraud issue is a criminal one to be handled by law enforcement. What might be a breach of contract would be a contractual nonperformance issue. There are also construction and real estate issues.

I think generally an attorney who handles construction suits and claims for plaintiffs might be appropriate; a real estate attorney with expertise in that area might also work. Personally I'm partial to mid-size or large law firms with major practice areas that can work together on various aspects of a case.

You could start by contacting the county or state bar association, briefly explain the problem and ask for lists of attorneys who would handle this kind of claim.

You could also contact AARP for general advice on pursuing a fraud issue; I doubt they would have attorneys they would use for referral purposes though but I have seen articles on how elder people have been scammed. AARP may eventually want to offer support through publication of the situation.

If the rehabber represented that he was licensed, contact the licensing department of the state in which the woman lives and report the action.
Contact the BBB as well; it's not a regulatory agency, and I doubt if the shyster is listed with them, but it would provide an alert.

Babalou's spon on with her recommendations and the priority of contacting the police.

My mind is so wound up with anger at what happened that I just can't shut it off!

Other aspects to pursue:

1. Do an online search or ask the county clerk to research this individual's name with the goal of determining whether or not he has (a) filed construction liens against others and (b) has any suits against him for breach of contract, misrepresentation, etc.

2. Ask the police if they have any information on his past activities; he may have been doing this for quite some time.

3. Ask the police if he has any aliases, either personally or as a "business". I have a feeling he's a practiced con artist.

I'm also concerned for the security of your friend. Can her neighbors look out for her, or are there any relatives who can stay with her temporarily?

Another consideration might be to ask the police to assist in getting a PPO against this person.
Curious if the elder continued to live in the house will work was being done, or was this house boarded up and the buyer found out who was the owner?

One large red flag is the $14k of work... and since it isn't all that noticeable what had been done makes it questionable. Even behind the scenes work like re-writing the whole house and/or putting in all new plumbing, it wouldn't have been $14k. If it was, then it makes me think the house is actually worth much more in the sellable real estate market.
FF, there are a lot of questions about this "transaction" that make me suspicious. I think your suggestion that the owner might not have been living there is insightful - that would allow the "contractor" to get away with a lot.

That's an interesting concept, and scam - fix up dilapidated or boarded up houses accompanied by an offer to purchase even though the real intent is to scam.

I ran into a few characters when I was getting bids to fix up my sister's house. I remember one that just raised the red flags repeatedly. It's been several years and I don't recall what the tip-offs were, but this guy was just so "all over the place" with his positions that I knew nothing he said could be relied on.

Just recently I tried to find someone to help with my yard. One who was recommended not only executed a right turn but did another right turn and wanted not to do what I wanted done, but to remove all the 300 or more patio stones from the garden and replace them all with grass. I figured he was mentally calculating multiples of what he could get if he could convince me to go so far beyond what I wanted and could afford.

Lot of bottom feeders out there.

It's unfortunate there are such bottom feeders preying on people. Too bad we can't send them to work for Donald Trump.
From what I understand about this one aspect of real estate law: If the seller performed in good faith and did not cancel or interfere with the sale, then the sale did not go through because the buyer caused it. No judge, Imop, would make her pay, instead she should be suing to enforce the sale; or for breach of contract.
This is just a lay person's opinion, to help you decide a direction to go in when consulting an attorney. Please protect this elder!

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