Risk of Buying Housing from Phone Fraud Victims: Consequences of Losing an Apartment and Remaining Mortgage Burden for Three Decades
In a recent court ruling, pop star Larisa Dolina regained possession of her five-room mansion, which was sold due to a phone scam. The market price of the property, located in Russia, is approximately 200 million rubles. However, the buyer, an employee of a Moscow university, was left with nothing.
This incident serves as a stark reminder of the risks involved when buying real estate, especially from potential scam victims. One such risk is the jeopardizing of ownership rights, a common issue in cases of elder financial abuse or impersonation fraud.
The court may invalidate transactions if elder abuse or forgery is proven, potentially reverting ownership to the original victim or their estate. This puts buyers at risk if due diligence was insufficient. To protect their ownership rights, buyers should take multiple preventive steps.
Firstly, conducting thorough identity verification of the seller is crucial. This includes cross-checking contact information and legal documents, especially if signs of inconsistency arise. Reputable real estate agents, attorneys, and title companies experienced in fraud detection can help verify seller identity and the legitimacy of the transaction early on.
Secondly, obtaining title insurance is essential as it offers financial protection to the buyer against losses or legal claims if ownership is disputed due to fraudulent seller identity or other similar scams.
Thirdly, buyers should watch for warning signs of financial abuse or elder exploitation, such as sellers refusing to speak independently, signs of coercion, or rapid, “too-good-to-be-true” offers from unknown buyers or sellers. If suspicions arise, it is advisable to halt the transaction, seek legal advice, and report concerns to law enforcement or appropriate authorities promptly to prevent being defrauded.
In cases where there are signs of fraud from the seller or intermediaries, filing a report with the police and sending a complaint to the Central Bank to include these individuals in the "blacklist" could strengthen one's position in the future.
It is also recommended, when buying real estate from grandparents, to require them to obtain certificates from a psychiatric and narcological dispensary on the day of the transaction, stating that they are not registered there, to prevent future disputes.
If there are violations during the underwriting process, filing a complaint with the bank, highlighting the violations in the property check, and demanding compensation for damages is an option. However, if the courts are lost, and the mortgage for the lost apartment still has to be paid, bankruptcy is a last resort, only relevant if the borrower can't pay the loan and there are arrears. The court's decision will depend on the financial situation of the applicant and the presence of other property.
In summary, while buying from a scam victim can risk ownership disputes, diligent verification, working with knowledgeable professionals, and purchasing title insurance are critical to protecting the buyer’s rights and investments in such complex situations. A conscientious buyer can also go to court with a claim against the Russian Federation for compensation if their deal is deemed invalid, and the amount can reach the sum spent on buying housing.
- Purchasing sports equipment can be risky if proper verification of the seller is not carried out, especially when dealing with individuals who may be victims of financial abuse or impersonation fraud.
- Weather conditions can impact the real estate market, as adverse weather can affect property prices and even hinder the closing of transactions, making due diligence all the more important in such scenarios.
