Today no one is safe from encountering scammers. Moreover, dishonest citizens ply their trade in a variety of areas, from banal shortchanging in the market to forging signatures in financial contracts. The real estate sector is especially attractive to scammers, because here, if they are lucky, they can quickly get a very substantial sum.
There are hundreds of fraudulent apartment schemes. Below we will discuss the five most common of them, and give advice on how to avoid becoming a victim of scammers, and what to pay special attention to when concluding such transactions.
Fraud with deposit
One of the most popular types of real estate fraud is deposit-based fraud. The property is offered for sale at a very competitive price. At the first meeting, the buyer is presented with documents confirming that the property really belongs to the seller.
The buyer is satisfied with everything, and he declares his readiness to complete the transaction. The seller puts forward the condition that he needs a deposit. The relevant agreement states that if the buyer refuses the transaction, the deposit will not be returned to him. After transferring the deposit to the seller, the buyer suddenly becomes aware of facts that were hidden from him by the other party at previous meetings, but at the same time they are very significant. The buyer refuses the transaction and loses the deposit. The amount of the deposit is not critical for the buyer, but nevertheless, the deception is obvious. Although, the parties entered into an agreement, therefore, in a formal sense, the seller’s actions can be considered legal, and there is no corpus delicti in them. In transactions with a deposit, you need to pay attention to the little things and try to understand the seller’s logic.
What should you do when buying an apartment in a new building?
The most correct decision when buying a new apartment would be to sign an agreement directly with the developer. If this is not possible, you should choose real estate agencies that have been on the market for several years and have a good reputation. Before signing the contract, you need to require the developer to show the relevant documents for this property, as well as a building permit on this site. If for some reason you are denied this, then be sure that there is something unclean here. In this case, you should refrain from purchasing real estate.
The emergence of unexpected heirs
The next fraudulent scheme has to do with inheritance. In general, the topic of inheritance in real estate is very attractive to scammers. The reason for this is the imperfection of the law and, so to speak, the “nothingness” of the property belonging to the deceased.
For example, an apartment is offered whose price is 20% lower than the market price. Explaining the reason for such generosity, the seller usually says that the property was inherited and is being sold cheaply solely because of an urgent need for money. A purchase and sale transaction is drawn up. And after a little time, another heir of the former owner of the apartment suddenly appears, who declares that he just learned about the death of a relative, and immediately, as provided by law, came to the notary in order to submit an application for acceptance of the inheritance. And already there, at the notary’s, he “suddenly” found out that the apartment had been sold to a new owner.
After this, the buyer spends a long time proving in court that his actions when purchasing real estate were absolutely legal, and that there are no grounds for invalidating the purchase and sale agreement. And the new heir, seemingly also on completely legal grounds, claims that he did not know and was not aware of the death of his relative, and now he has all the rights to inherit property.
Unfortunately, the court usually takes the side of the heir. After all, according to the law, if he presents to the court evidence that he really did not know about the death of a relative, then the period for accepting the inheritance can be restored. In this case, the purchase and sale transaction for the inherited apartment is considered invalid. As for the apartment seller, look for the wind in the field! He has already spent money on the apartment, but he has no property.
Common methods of deception when buying apartments
Surely everyone has seen advertisements for the purchase or sale of apartments without intermediaries. On the one hand, this approach allows you to save money, but on the other hand, it significantly increases the risks of the parties entering into a transaction. Most often, in fraudulent schemes, adverse consequences occur for the buyer, although cases of deception by the seller are also known. Let's look at the most well-known deception schemes when buying apartments on the secondary market.
Selling by duplicates
One of the most criminal methods of deception is the execution of contracts with several buyers at once. In this case, the owner of the real estate will be the one who first registers the rights to it. It will be very difficult for the other victims of the scammer to get their amounts back.
How to avoid being scammed
To protect yourself from such situations, you should remember that transferring money before registering the right to a new apartment is fraught with negative consequences.
Availability of applicants for an apartment (share)
This method is not always directly related to fraud. Usually, the owner simply remains silent about the existence of rights to the residential property from other persons (for example, temporarily absent relatives). If the case comes to trial, the court will be on the side of the emerging applicant.
How to avoid being scammed
If you are worried about how to buy an apartment correctly so as not to be deceived, be sure to ask how the property came into the ownership of the seller. For example, when transferring rights by inheritance, the signatures of all heirs will be required. Sometimes permission from the guardianship authorities is required, the consent of the spouse even after a divorce, and so on.
Reduced price for the property in the contract
The owner asks the buyer to indicate a reduced amount in the purchase and sale agreement, supposedly to reduce tax. In this case, the difference is often transferred to the seller without even a receipt. Then the fraudster, under a pre-thought-out pretext, goes to court and demands that the transaction be declared invalid. In this case, the buyer will receive, by court decision, only the amount specified in the contract.
How to avoid being scammed
You should not indicate the undervalued cost of the apartment in the documents. At best, the acquirer becomes an accomplice to a tax violation; at worst, he risks losing a decent amount.
The seller deliberately does not check out
After closing the deal, the seller suddenly announces that he has nowhere to move. The new owner is trying to evict the previous owner from the apartment, but the latter goes to court with a request to annul the deal, providing convincing arguments. The catch is that the plaintiff has the right to ask the court for a phased return of the money received from the buyer, and the judges can meet him halfway.
How to avoid being scammed
To protect yourself and not fall for the bait of a dishonest seller, it is worth specifying in the contract the terms for the former owner’s discharge and assigning penalties in this regard.
These are not all cases of deception when purchasing apartments, which dishonest citizens use when concluding transactions. According to statistics from law enforcement agencies and real estate companies, cases of sales of non-privatized housing, sales of apartments under an expired power of attorney, using fake title documents, and so on are often recorded.
Use of an illegal court decision on inheritance of property
Some scammers operate using an illegal court decision that allows them to inherit property. Usually, for this purpose, they prove their relationship in the district court of a small city. According to the law, the fact of relationship is established at the applicant’s place of residence. There is hardly any need to voice the factors that contribute to fraudsters in obtaining such a court decision. Anyone who wants to get it knows how to do it.
Having obtained a decision from such a court, the fraudster goes to a notary to declare his rights to the inheritance of the deceased. It is clear that most often the objects of attention of swindlers are the apartments of people who have no immediate relatives. Or there are such relatives, but due to some circumstances they cannot formalize the inheritance within the six-month period established by law (for example, they are serving a sentence in prison).
Conspiracy of scammers with an unscrupulous notary
For a will to have legal force, it must be approved by a notary. It must be said that the Federal Chamber of Notaries regularly carries out purges, depriving the powers of notaries who are accused or suspected of illegal activities. And yet, scammers find unscrupulous notaries who are ready to certify a will illegally, “retroactively,” in the absence of the testator himself. At the same time, his signature is forged.
For example, a person died without leaving a will. In this case, his apartment must pass to the heir by law. However, having entered into an agreement with a notary, the scammers create a “will” according to which the apartment should go to one of them. You need to understand that challenging a will certified by a notary is a very difficult task. First of all, because since 2020, the notary’s certificate has been given the force of a certified fact, that is, it is practically undeniable. Further, among notaries there is also such a thing as corporate solidarity. That is, the notary community does not enthusiastically accept the fact of a notary’s dishonesty, so an ordinary citizen has very little chance of proving his illegal actions.
Fraudsters use fake documents
Most people don't even realize how realistic fake documents can be. There are “craftsmen” who can concoct a court decision with seals and signatures; a will, as if certified by a notary; certificate of inheritance, etc.
For example, a Sochi resident’s aunt, who lived in the Moscow region, died. The man was her only relative, and within the period established by law, he accepted the inheritance according to the law. But when there were only two weeks left before the expiration of the six-month period, the notary who was in charge of the inheritance case was provided with a will in favor of another heir, allegedly certified by a notary from Kursk. When they began to look into it, it turned out that the signature and seal on the will did not match the signature and seal of this notary. In addition, there was simply no such will in his registry.
How to recognize fraud
First of all, the low price of real estate (especially if it was inherited) should cause caution. All buyers should remember: having illegally inherited property, scammers try to sell it as quickly as possible. After all, there is always the possibility that a criminal plan will be discovered, or that a real heir will emerge. Therefore, in order to speed up the sale, they offer real estate at prices below market prices (usually no less than 20%).
Another sign of fraud may be the frequent change of homeowners. Often, in order to create the appearance of legal ownership of a property, scammers conduct several transactions. According to experts, if the apartment has changed owners more than twice over the last three years, it is better to refuse the purchase. Moreover, even if one transaction was carried out within three years after the acquisition (a gift transaction between relatives does not count), this should raise red flags, because a personal income tax of 13% is a serious argument. And more than two transactions in three years, as practice shows, almost always indicate that the property is very problematic.
Fraud when buying an apartment due to errors in the contract
Today, more and more often, buyers are faced with situations when they find out that the premises they purchased from the developer are mortgaged on loan terms. Thus, shareholders find out too late that they have not entered into an agreement on shared participation, which must be drawn up in Form 214-FZ, but rather a preliminary agreement on shared participation, allowing the developer to register real estate in his own name and dispose of it at his own discretion. Such inattention of shareholders leads to the fact that they cannot use the pledged property by paying its cost. Actually, this is the kind of mistake that an unscrupulous developer is counting on.
Any shareholder must understand that, despite the fact that unauthorized construction was carried out and the house was not put into operation, the culprit is unlikely to ever be found. In this regard, it is not recommended to sign equity participation agreements, regardless of any promises from the developer.
It is worth paying special attention to the fact that there are situations when a house has already been fully erected and even occupied, but later it turns out that the construction company did not have permits for the construction of a new building at all. In such cases, the house is recognized as an unauthorized building, and the people living in it can be evicted, and the house itself can be demolished. In this case, shareholders will not be compensated for either property or moral damage.
Fraud in the purchase of housing can be carried out by intermediaries, who are often hired by the developer. Such subcontractors are engaged in the sale of apartments in accordance with an agreement with the developer. They charge their own interest to each buyer. However, you should beware of intermediaries, because it happens that they disappear with money, and the people who entered into contracts with them are left with nothing.
What documents should be required from the seller?
No one can give an absolute guarantee of the purity of the transaction. However, you can secure the transaction to a certain extent by requesting some documents from the seller or obtaining them yourself. If there is any doubt, you need to ask the seller for additional documents. After all, he wants to sell the apartment, which means it is in his interests to convince the buyer that the transaction is safe.
The standard set of documents is presented:
- certificate of ownership/extract from the Unified State Register;
- certificates from PND and ND;
- document of title (agreement, certificate of inheritance);
- spouse's consent to the transaction.
An additional set of documents may include:
1. Certificate of transfer of rights to the purchased housing. It can be issued by the territorial body of Rosreestr only to the owner of the property. Using this document, you can trace the chain of transactions along with the grounds for the transfer of rights.
2. Extended extract from the house register. By studying it, you can find out who was registered in the apartment, where they checked out and for what reason. Here you need to pay attention to whether young children were registered at this address, where they were discharged, and how old they were at the time of the transaction. If a person was discharged from the apartment due to a conviction, then problems with the apartment may also arise.
3. Technical passport of BTI. From it you can find out whether work has been carried out in the apartment that needs to be coordinated with the relevant authorities. An important point: all statements and certificates must be received in the presence of the buyer or his authorized representative.
4. If we are talking about inherited property, then you should look at how long the heir owned the property. If it is less than three years, it makes sense to study the materials of the inheritance case, which the heir can take from the notary.
- Related Posts
- Last will: how to bequeath an apartment correctly
- What you need to know about inheritance: 10 important facts
- Risks of heirs: debts passed on by inheritance
“Fake” apartments, or unnecessary information service
Another common scheme for “relatively honest” taking money from the population is the so-called “information service”. I wouldn’t like to paint all agencies with the same brush (many of them work quite professionally), but there are still plenty of fly-by-night companies that continue to take money for poor-quality information about rental apartments.
The essence of the work of these very “news agencies” is that they “catch” clients for some particularly “tasty” option (for example, a one-room apartment with a fresh renovation near the metro for 230 USD) and then, promising to give number of the owners of the coveted apartment, they offer to sign an agreement for the provision of information services. Usually everything becomes clear after it is signed.
It turns out that the “dream apartment” has just been rented out, and the other options are either no different from those you could find on your own, or, again, not entirely real. For several weeks you may be fed breakfast and given telephone numbers of non-existent owners or downright bad options, and with all this fuss, you see, the contract will expire. You are unlikely to be able to get back the money you paid for the service. Formally, the information was provided to you.
Advice: look for an apartment “after the fact”.
If you don’t want to pay for a service you don’t need, but need professional help, pay attention to “pay as you go.” In this case, the agency will have to select for you the object that will meet your requirements. And the company will receive payment for its services only after you and the owner, as they say, shake hands. Typically, the cost of such a service is 5 basic units.
Photo used as illustration.
