Land Owners may be Targets for Fraud

Every time we turn around, there is another way someone has figured out to scam people. Because real estate often involves large amounts of money, it’s no surprise that there are consistently new ways someone is trying to steal that money. Recent scams include renting out properties they don’t own or sending alternate wiring instructions so money is wired into the fraudster’s account instead of the title company’s. Now land owners may be targets for fraud.

Land buyers beware

This latest scam is the fraudster posing as a land owner. They employ a real estate agent to sell their land. The problem is that they aren’t the legitimate land owner so don’t have the authority to sell the land. The fraudster cons the real estate agent and brings them unknowingly into their scam. In Colorado title companies facilitate real estate sales. There are documents that need a notary and IDs to review in order to close a sale. The only way I see the fraudster getting away with any money is if they have a fake ID made in the real owner’s name or if they found someone’s ID and are able to exploit it. No matter how they manage to pull off the fraud, it results in a legitimate buyer paying the fraudster for a property and thinking they own it. The buyer’s name goes to the county as the new owner and they could be moving forward building a home on the piece of land before the real owner targeted for fraud even knows anything has happened.

Impacts to land owners

This sale obviously creates issues for the real land owner. If the targeted land owner rarely sees the land, there may be a house on the site the next time they see it. A house built by someone that thinks they own the land but unless it is disputed, no one knows otherwise. This creates a sticky situation for both the land owner and land buyer. Who owns what? I would think that the original land owner would end up getting ownership of the land back. After all, they never sold it. Although, that might be difficult to prove. The land buyer would be out the money they paid for the property plus any improvements to the property. Maybe the land owner would buy the improvements from the defrauded buyer. Maybe not. Meanwhile, the fraudster is off counting their money and defrauding someone else.

How to avoid the fraudsters

If only this was an easy answer. Real estate agents and title companies need to be sure and do their due diligence. An agent should take reasonable measures to ensure the people they are dealing with actually own the property to be sold. Title companies should be diligent checking IDs and in their conversations with the sellers. Buyers should never send money to someone directly. Even a for sale by owner sale should involve a title company or attorney. If there is ever a red flag that comes up during a transaction, it should be followed up on. Don’t hesitate to express any concerns with the real estate agent involved in the sale. Land owners should visit their land periodically. Occasionally look at the ownership records the county has online to ensure their name is still on record. If a fraudulent situation is occuring, contact Colorado Bureau of Investigation by emailing reportwirefraud@state.co.us or visit their fraud website for more information. We all need to be diligent to help protect those land buyers and land owners that may be targets for fraud.