Fraudulent schemes and scams continue to rise in frequency and cost consumers billions. In 2022, consumers reported losing almost $8.8 billion to fraud, a 30% increase from 2021. When an individual loses money due to fraud, they may be able to recover their losses through a civil claim. Contact The Hunnicutt Law Group to discuss your case.
Real Estate Fraud
Texas outlines two forms of fraud in real estate transactions. The first form consists of a false representation of a past or existing material fact when the representation is:
- Made to a person to induce them to enter a contract, and
- Relied on by that person in entering into the contract.
The second form of fraud in a real estate transaction consists of a false promise to do an act when the promise is:
- Material,
- Made with the intention of not fulfilling it,
- Made with a purpose to induce a person to enter into a contract, and
- Relied on by that person in entering into the contract.
Fraud can also occur when a person conceals or fails to disclose material facts about a property before a real estate transaction.A common type of real estate fraud occurs when the scammer poses as a real estate agent or broker associated with a property transaction. The scammer sends a communication to one of the parties to the real estate transaction to convince them to wire money to a fake account instead of the intended recipient. Scammers falsely claiming to be affiliated with well-known companies, also known as business imposters, caused more than $660 million in losses in 2022. According to a 2022 American Land Title Association survey, approximately 46% of respondents said their employees receive at least one email each month containing fraudulent wire or payoff instructions.
Real Estate Investment Fraud
Consumers lost approximately $3.8 billion to investment scams in 2022, almost double the losses reported in 2021. Investment scams entice victims by promising a low-risk way to earn money quickly and easily. One form of investment scam is real estate investment fraud.
A real estate investment trust (REIT) is a company that owns or finances income-producing real estate across a particular sector. Everyday citizens invest in REITs to earn dividends on their investment. Investment brokers often tout REITs as offering consistent annual returns and being easy to buy and sell. Non-traded REITs present significant risks to investors because they are illiquid and lack transparency. Investment fraud involving REITs can include:
- Providing false information in sales tactics,
- Overpromising returns to investors,
- Underplaying risks of the REIT, or
- Falsely representing a non-REIT as an REIT.
If you suffered losses through real estate securities fraud, a licensed attorney may be able to help.
Examples of Real Estate Fraud
Real estate fraud can happen in a variety of different ways. Consider when a homeowner wants to sell their house but knows the electrical wiring is not up to code. A buyer offers to purchase the house for the list price. The owner agrees to sell the house and completes the transaction without telling the buyer about the faulty electrical wiring. The owner’s failure to disclose material facts about the property is an example of fraud in real estate.
Alternatively, the buyer may agree to purchase the house, conditional upon the seller updating the faulty wiring. Despite guarantees of fixing the electrical issues, the seller performs minor cosmetic repairs to give the impression that the entire system was updated. The seller’s false assertions about replacing the wiring to induce the buyer to enter the contract is also a form of real estate fraud.
What Is Real Estate Fraud? Contact The Hunnicutt Law Group Today to Learn More
Real estate transactions are complex and typically involve large sums of money. Fraud can cost a victim hundreds of thousands of dollars. A qualified real estate lawyer can help you recover these losses. The Hunnicutt Law Group strives to provide excellent legal advice during your time of need.
With real estate fraud claims increasing every year, you need to know where to find an experienced attorney to help you recover your losses. Our founding attorney, Steve Hunnicutt, has over 30 years of legal experience. Steve offers clients an honest, fair assessment of their case and advocates tirelessly for the best possible result. If you were a victim of fraud, contact The Hunnicutt Law Group to schedule a consultation with a member of our team. We offer video conferencing for your convenience.
J. Stephen Hunnicutt
Our founding attorney, Stephen Hunnicutt, set the precedent for a commitment to excellence and a focus on the client. With 25 years of experience, he has handled countless cases involving business litigation and commercial litigation. Over the years, Mr. Hunnicutt has worked as in-house counsel for a Fortune 500 energy company, a large firm, a small firm, and finally, in his own practice.
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