Mar 31, 2023 | Uncategorized
The U.S. Secret Service has seen a sharp increase across the country in reports of fraud involving vacant land. A common scheme playing out in the current real estate market involves scammers posing as owners of vacant land, wanting to sell quickly for cash at below market prices who then disappear without a trace. An unknowing buyer winds up with no land and the loss of a lot of money with little to no chance of recouping those funds. This can occur with both residential and commercial land.
The recent tactics the scammers have implemented begins with scammers researching local land records to find vacant land with no liens or encumbrances. Once they have identified the owner of the land, they pose as that owner and contact a realtor to list the property for sale. It is common that they will list the property at below market value for a quick sale and indicate a preference for a cash sale. They typically communicate only by email or text. They will arrange for their own notary signing of documents and claim to be in another state or another country. The purported notary is likely to be one of the fraudsters using the identity of an actual notary. They may even be signing by power of attorney and the attorney-in-fact is not local. At the time of closing, the closing attorney or title company transfers the proceeds to the scammer. The fraud is typically not discovered until after the sale has been consummated.
We’ve heard that these frauds are happening in New England. In one such incident that was shared with us, the seller claimed to be in South Africa and obtained the identity of a notarial officer in the embassy consulate and produced a deed that appeared to be officially notarized. The fraud, in this case, was discovered after the deed was accepted by the local recording office and funds disbursed. Although unconfirmed, we have reason to believe someone at the local recording office, handling the deed as part of the office’s administrative tasks, recognized the name of the seller as a friend and contacted the true owner and asked if they had sold their property. This led to the discovery that true owner had no knowledge and had not put the property up for sale.
Another scammer claimed to be in California and was planning to sign the deed with a power of attorney. This was a near miss as the buyer had a question about a zoning issue and called the seller who knew nothing about the proposed sale.
The Rhode Island Association of Realtors recently published an article on this type of fraud. The article identifies several cases of vacant land fraud schemes attempted in Rhode Island and lists several actions a real estate broker or sales person can take to avoid becoming an unwitting facilitator in the schemes. To read the article, follow this link:
Here are some tips on how to prevent a loss from a vacant land scam:
1. Be on alert when your transaction is for vacant land.
2. Send an introductory letter to the seller at their address as it appears in the Tax Assessor’s database, confirming that they are selling their property. Stewart Title has a template for a seller letter available in this bulletin by clicking the “form” link: https://www.virtualunderwriter.com/en/bulletins/2022-4/sls2022004.html
3. Independently do an online search for the identity of the seller.
4. Require the seller to show ID over a virtual meeting.
5. Verify the notarial officer in the state or country they are from and contact that officer to confirm they notarized the document in question and reviewed the seller’s ID.
6. Subscribe to a service that can confirm wire instructions for your seller.
7. Pay attention to a feeling that all is not right with this transaction.
8. Make sure your staff is aware of this type of risk.
This list is not exhaustive, and awareness is key. Scammers are always looking for the next best way to part people from their money and this particular type of fraud is incredibly costly. In a challenging real estate environment, we are all at risk. Our diligence is the best tool for us to avoid this type of scam.
Stewart Title has a recent Bulletin regarding this topic that you should find helpful and, as always, please reach out to your local underwriter if you encounter any red flag or have questions.
https://www.virtualunderwriter.com/en/bulletins/2023-1/sls2023003.html
Jun 24, 2021 | Uncategorized
As a hopeful buyer, you may have heard the terms home insurance and home warranty mentioned by your realtor or real estate agent. While they sound like similar things, they have two very different purposes.
Home insurance primarily protects your property from accidental damage caused by specific events like a flood or fire. A home warranty only covers particular components of your house and pays for the repair or replacement. Using both services means your house will be protected no matter what happens down the road.
Home Warranty
Home warranty policies are a great way to protect the inside of your house. Any time an appliance or system has a failure due to age or natural wear and tear, your service provider will pay for the parts and labor of the repair. However, if the broken component is too old or expensive to fix, the warranty company may just replace your machine with a brand new one.
Most home warranties cost about $30 to $50 per month, but that can vary depending on the service provider, geographic location, and level of coverage. Most contracts also only last a year, so you will need to renew annually.
Warranties cover a wide range of appliances and systems. Even the most basic levels of coverage will protect your refrigerator, stove, or dishwasher. Bigger plans will also protect other parts of your home like the HVAC system, electrical, or plumbing. For example, if you suddenly find yourself without a functioning air conditioner in the middle of summer, the service provider will help you find a repair service and pay the bill.
Home Insurance
Similar to a warranty, your insurance will protect your property from specific things. Damage created by storms, floods, fires, or theft are included in most policies, but it won’t pay for repairs caused by general use. So if you have a washing machine that stops working, you probably won’t receive any assistance from the insurance company. Instead, your provider would cover the costs of repairing your roof from hail damage or a broken window caused by a burglar, both of which wouldn’t be covered by a home warranty.
When purchasing your new home, your lender will require you to buy coverage before taking ownership of the house or completing the sale. That’s because they want to ensure the property is protected in case of natural disasters or accidents.
Home insurance policies usually cost anywhere from $300 to $1,000 a year, depending on your location, house size, building type, and the service provider. Like a home warranty, the coverage will need to be renewed annually.
Buying a house will likely be one of the most significant investments you will make in your lifetime. That’s why you should consider both warranty and insurance coverage to protect your new home. Whether you plan to stay in your new residence for years or eventually move your family to a bigger house, both services can give you peace of mind and save you thousands of dollars.
Feb 14, 2020 | Uncategorized
By Attorney Nicholas Thalheimer, Esq.
Oftentimes when there is a sale of property the seller happens to be an “Estate”, essentially this means that the owner of the property has passed away and an Estate has been opened in the applicable Probate Court.
So, what happens now? The process of opening an Estate involves several steps that must occur before a Personal Representative is appointed and empowered to make a conveyance of estate property. Additionally, even after appointment there are still strict rules that must be followed for a Personal Representative to make a valid conveyance. Every estate opened with either have a will (testate) or not have a will (intestate), either way both will have certain issues that come up.
If an individual passes away without a will the decedent will be considered to have passed away intestate and testate if there was a will. One very big issue in the context of an intestate estate is that there is no will, and if there is no will there is no power to sell in the will, so before a Personal Representative can affect a conveyance of property they would need to obtain a license to sell from the probate court which can take several weeks. Its also not simply enough to have a will to avoid this issue, a will must contain specific language before a Personal Representative is considered to have been granted a power of sale in a will. All too often a poorly drafted will or a “do-it-yourself will” will not have a sufficient power of sale in it, if it has one at all.
Additionally, the Personal Representative is a Fiduciary of the Estate and has a responsibility to the heir/devises of the Decedent and owes them a duty to handle the affairs of the estate property. One very common error are deeds from an estate for nominal consideration (1.00) basically a Personal Representative cannot “gift” property or give it away as it is presumed that a conveyance for nominal consideration is a gift and would likely be considered “a breach of their fiduciary duty” in the same way that a deed executed pursuant to a power of attorney for nominal consideration. The statutes indicate that a Fiduciary Deed must be “for value”.
Another common issue is the time at which a devisee has the power to convey after having taken title through a probate. Basically, an estate has to be “closed” pursuant to the court allowing a “petition for complete settlement and distribution”, at that point the estate property has passed to the heir or devisees as may be the case. Generally, an estate cannot be closed for at least a year as that is the statutory time given for any potential claims against the estate to be filed. Its not infrequent that a Complete Order of Settlement and Distribution is never filed. Under that set of facts it is presumed that after 6 years an heir/devisee has the power to convey from an estate that was never formerly closed as the statutory time in which a Fiduciary has to petition the court to sell estate property for “costs or expenses of administration” will have passed.
Naturally, the conveyance from an estate is ripe with the possibility for errors for the inexperienced conveyancer and its very important to have an experienced conveyancing attorney involved with your transaction as these issues can be spotted early on and resolved as quickly as possible.
As always please contact this office for more information.
Feb 5, 2020 | Uncategorized
Traditionally, a paper Promissory Note associated with a real estate mortgage is a printed paper document which bears the personal ink signature of the borrower. This paper note has an actual “cash” value and the original physical note is held by the lender as if it were actual cash. Unlike a traditional paper note, and eNote is strictly in digital form and must be retained in a secure, digital environment called eVaults, not unlike crypto currency. Watch the video to learn more.
Feb 5, 2020 | Uncategorized
Although the definition of an eClosing can vary from state to state and entity to entity, some definitions associated with eClosings are consistent. Watch the video to learn more..
- eDocuments – Mortgage related documents that are in digital form and not printed
- eSignatures – Personal signatures produced be electronic means and legally recognized as an indivduals signature.
- eNotarization – The official notarization or acknowledgement or witnessing of the signing (of eSigning) of documents, where the signor does not appear in person.
- eRecording – The process of digitally capturing, indexing and archiving title related documents.
- Full eClosing – The execution of electronic mortgage or closing documents that is completed with only eSignatures. The parties involved may or may not appear in person.
- In person eClosing – A closing where all or a portion of the documents executed with an eSignature and the parties involved, or at least the signors, appear in person.
- Remote Online Notary (RON) Closing – The electronic notarization of documents where the signor and the notary do not appear before each other in person, but over a remote digital connection (the internet). – Not recognized in Massachusetts
- Webcam closing – The execution of electronic mortgage or closing documents that is completed with only eSignatures. The parties involved do not appear in person. The entire closing is conducted remotely with eSignatures and RON.
Feb 5, 2020 | Uncategorized
An eClosing is a closing that includes the execution and electronic signature of some key mortgage documents in a secure digital environment, while other key documents may be printed and physically signed (often in the presence of a notary).
The difference between an eMortgage and an eClosing is simply that an eClosing may or may not result in an eMortgage, but eMortgages, which result in an electronic promissory note, are always a product of eClosings. Play the video to learn more.
