Maryland REALTORS® Online

Beware Scam Artists Targeting Unimproved Land

BY KATHLEEN DARTEZ, ESQ

The Director of Legal Affairs for Maryland REALTORS®’.

Q: A client contacted me when her elderly father had received a phone call in connection with the sale of unimproved land that he owned. He had not listed the property for sale and had no idea what the call was about. Can you provide any guidance on scams and vacant property?

A: Unfortunately, scams involving unimproved land have become a recent trend. The criminals perpetuating these scams have some familiarity with publicly available land records and identify properties which are often unimproved and unencumbered by a mortgage or deed of trust. The scam artist, identifying themselves as the actual owner, will contact a real estate agent stating that they want to sell the unimproved land and want the agent to represent them in the sale.

Since the scam artist is not the actual owner, they typically will not meet in person, and will insist that all communications be conducted electronically. The “owner” will state that they’re interested in a quick sale and will ask that the property be listed for less than market value. Typically, the scammers also state that they want to sell to a cash buyer and will quickly accept an offer. The “owner” will not appear for settlement in person and will insist upon a remote closing. Often, the fraudulent seller will enlist a co-conspirator to act as a notary for the transaction, and the bogus seller documents will be transmitted to the title company. The title company will collect the purchase price from the buyer and will unwittingly transfer the proceeds to the scam artist. The Deed, which appears valid on its face, will be recorded in the land records and it may take months before the fraud is detected.

How can these scams be prevented? Let’s start with the listing agent. If you receive a call from the “owner” of unimproved land, which is not encumbered by a mortgage or deed of trust, and the “owner” asks you to list the property for less than market value—those are red flags. You should request government ID and schedule an in person or zoom meeting. The listing agent should immediately attempt to verify the identity of the actual owner of the property through tax records, the land records, or a verifiable phone number. You could also conduct a social media search of the property and the seller. You should make every effort to contact the seller directly, using the information that you have obtained independently.

The best practice for the buyer’s agent is to use a trusted title company. Title companies routinely conduct settlements where one of the parties is in another state or country. Title insurance underwriters have agents and offices around the globe and will have procedures in place to verify the identity of the “seller” and to ensure that all documents are duly and properly notarized. The title company—not the seller—is in charge of selecting the notary and conducting the settlement.

Finally, you should encourage clients to create a Google alert of their property address. A listing would trigger a notification, alerting them to the potential scam. Follow the links below for more information.

United States Secret Service – Real Estate Scams

American Land Title Association – Wire Fraud Advisory