Common Real Estate Fraud Schemes: How To Avoid Falling For Intruders

Recommendation points

• Rented apartments and fake power of attorney
• Fake power of attorney and collusion with the former owner of the property
• Fake notary
• Registered relatives who do not know about the sale
• According to the documents, one apartment is in fact another
• Conclusion of a deal by an incompetent seller
• Undervaluation of real estate

There are many schemes in the real estate market, thanks to which scammers try to deceive gullible citizens who dream of buying their own apartment. Let’s consider the most common methods of such scams, as well as measures that will help customers not to fall for the bait of cybercriminals..

The constant rise in real estate prices, the excitement reigning in this market, as well as the gullibility and legal unpreparedness of many of our fellow citizens cannot but attract the attention of scammers. There are a huge number of schemes used by cybercriminals in the sale of apartments and houses. Let’s dwell on the most common.

Rented apartments and fake power of attorney

A very common scheme is when fraudsters rent housing, forge a power of attorney from the owners, receive duplicates of title documents for it, and then sell the property.

Often, the real owner of the home is also an attacker. He declares about the loss of title documents and receives their duplicates. And then he sells the same property several times. First on the original documents, and then on the duplicates. In this case, the buyer who is the first to register ownership of the apartment will be considered the legal owner of the apartment..

Therefore, when buying a home, you must be very careful about duplicate documents. Also, if the seller acts under a power of attorney from the owner, it will not be superfluous to contact the latter and find out whether he really gave a power of attorney to sell it.

Fake power of attorney and collusion with the former owner of the property

The owner of the apartment issues a power of attorney for its sale, but after a while he will cancel the power of attorney. The apartment is sold under a power of attorney that has already expired. After the buyer has paid the money for the property, the old owner states that it was sold against his will and goes to court.

In order to avoid such situations, it is necessary on the day of transfer of money for the apartment to contact the notary who issued the power of attorney and request information about its validity and validity.

Fake notary

There are situations when a notary, taking advantage of the potential buyer’s legal unpreparedness, deliberately makes mistakes in the contract. And after a while the seller goes to court with a claim to invalidate the transaction.

There is only one way to secure yourself in this case – by hiring a qualified lawyer who will analyze the preliminary and main sales contract and will be present at the conclusion of the transaction.

Registered relatives who do not know about the sale

Often, the happy owner of a newly acquired apartment discovers that strangers are registered in it, who did not know about its sale by the former owner. This can be, for example, his relatives who are in places of detention. After release, they can try to obtain through the court the right to live in an apartment and the chances that the decision will be made in their favor are quite high.

To prevent this, it is necessary, before buying a home, to take from its owner a power of attorney to receive an extract from the house book at the passport office or housing office. This document contains a list of people registered in the apartment.

According to the documents, one apartment is in fact another

In this scheme, the attackers actually sell the apartment to the buyer. But its market value is much lower than the amount requested by the seller..

Fraudsters advertise the sale of real estate, at the same time they rent an apartment with good repair, located next door, and during the inspection by the buyer change the signs on the doors.

In order not to get into a similar situation, you can just talk to your neighbors before buying and check the numbering of apartments on adjacent floors.

Conclusion of a deal by an incompetent seller

It happens that a transaction is concluded by an incapacitated person (of which the buyer does not suspect) and after a while his guardian goes to court with a claim to invalidate the transaction on the basis of Articles 171 and 177 of the Civil Code of the Russian Federation.

It is very difficult to defend against such a scheme. Sometimes the buyer manages to agree that two relatives of the seller will be present at the signing, who will give notarized certificates that the owner of the property is sane and gives an account of their actions. But even such evidence is not a 100% guarantee that the court will not recognize the transaction as invalid if the seller is declared incompetent..

It is best to try to inquire in advance about the identity of the seller and, if information appears that he is registered in a neuropsychiatric or narcological dispensary, immediately refuse the deal.

Undervaluation of real estate

According to the Tax Code of the Russian Federation, if the property is sold less than three years after the acquisition and its value is more than 1 million rubles, the seller pays 13% income tax. Therefore, the seller can simply persuade the buyer to indicate in the contract not the full cost of the housing, but only a part of it (for example, 1 million rubles) in order to pay less taxes and receive the rest in cash. After some time, the seller files a lawsuit demanding to terminate the contract. And in case of a positive decision, the buyer will be obliged to return the apartment, and the seller – to pay him only the amount specified in the contract. In this case, the buyer loses the amount paid in cash.

To protect yourself from such situations, you do not need to agree to any persuasion of the sellers and always indicate in the contract only the full amount of the transaction.

The list of schemes and tricks used by fraudsters when selling apartments is incredibly wide and this article contains only a small part of them. There are many measures that a property buyer must take in order to be on the safe side. But, most importantly, remember one thing – you can’t take anyone’s word for it, you need to carefully check each document provided and be sure to inquire about the seller and the real estate he offers.