Wednesday, 18 October 2017

Housing Counsel: Beware of Unsolicited Purchase Offers

Written by Posted On Monday, 31 October 2005 00:00

Question: My late brother bought a vacant lot in Florida in the 1960's. This was during the infamous land grab where the State of Florida did nothing to regulate the investors/speculators. I have owned the lot since my brother died.

Without any solicitation or inquiry on my part, I recently received an offer through the mail to buy the lot. They set the price at a level which I have been advised is not at all realistic. This was a California company, and I wondered why they would be interested in buying Florida land.

In any event, I called their 800 number, and was promptly faxed an "Agreement." This spelled out the price and a statement that I would receive my proceeds check within one month. I signed the Agreement and returned it.

About two weeks later, I was advised that they were doing a title search and that everything was going well. However, I subsequently received another letter indicating that they were not going to buy the lot. Ironically, on the same date that I received the rejection letter, they sent me another "offer to buy," which was similar to the first letter I received.

I am a 77 year-old widow and would like to sell the lot. Do you think I have any recourse against the California company?

Answer: No. I think that you may have been the victim of a possible fraud.

I hope that you did not give any personal information to this company, such as your social security number or your bank account information. I also strongly suggest that you immediately contact the Recorder of Deeds in the county where your lot is located to make sure that you still own it.

I am concerned that you may have inadvertently signed a document -- such as a power of attorney -- which would give the California company the right to transfer your property.

In order to file a lawsuit, you have to allege that there is a valid, binding contract. In order to have a contract, there are three legal requirements:

  • offer: in your case, the California company made you an offer;

  • acceptance: yes, you did accept the Agreement, and

  • consideration: generally, some money has to be involved, such as an earnest money deposit. Apparently, no money changed hands between you and the company. However, it is also consideration if you take some action (or refrain from taking some action) based on the Agreement. In your case, you relied upon what you thought was a valid contract, and refrained from attempting to sell it to anyone else. A court of law might find that this is sufficient to constitute consideration.

However, your attorney will have to review the situation to determine if, in fact, this was a clean contract, or whether it had any contingencies -- any way out of the deal for the company.

Assume that you have a binding contract. You live in Maryland, the property is in Florida, and the company is based in California. You may be able to sue them in Maryland, based on what is known as the "long-arm" rule. This basically says that out of state parties who do business in your state can be sued in your state. However, the law requires "sufficient contacts" within your state. At the present time, we really do not know how many such offers -- how many contacts -- the California company had in Maryland.

You could also file suit in Florida or California, but that would require you to spend a lot of money retaining local legal counsel, and possibly having to travel periodically to that state for court-related events.

Based on the low value of your lot, I cannot recommend filing suit.

However, you definitely should file a complaint against this Company in all three jurisdictions, as well as to the Federal Trade Commission here in Washington. Maryland, Florida and California all have Attorneys General, and your complaint should be addressed to those offices.

I make no allegation against this Company. It may be a valid, honest operation that wanted to purchase your lot but discovered problems -- such as title glitches or environmental concerns. From the facts, however, the company does not meet the "smell" test. This sounds to me like a scam, possibly designed to get personal and financial information from you.

Every day, our email boxes are flooded with potentially dangerous proposals. For example:

  • a bank asking you to confirm your account;

  • a mortgage lender telling you that you have been approved for a ridiculously low mortgage loan (even though you have not even applied for a loan);

  • a credit counseling company offering to clean up your credit standing, or

  • the son of a deposed Nigerian official, asking if you are willing to funnel millions of dollars through your bank account and get a large percentage as your commission.

Despite the many consumer protection laws at both the Federal and State levels, the moral of this story is "Caveat Emptor" -- let the buyer beware.

If you receive an offer which is too good to be true, then you are probably right.

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Benny L. Kass

Author of the weekly Housing Counsel column with The Washington Post for nearly 30 years, Benny Kass is the senior partner with the Washington, DC law firm of Kass, Mitek & Kass, PLLC and a specialist in such real estate legal areas as commercial and residential financing, closings, foreclosures and workouts.

Mr. Kass is a Charter Member of the College of Community Association Attorneys, and has written extensively about community association issues. In addition, he is a life member of the National Conference of Commissioners on Uniform State Laws. In this capacity, he has been involved in the development of almost all of the Commission’s real estate laws, including the Uniform Common Interest Ownership Act which has been adopted in many states.

www.kmklawyers.com

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