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Directories Int'l Realty US Realty
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Real Estate Fraud Stuart Lieberman, Esq., Buying a home is one of the biggest decisions and investments that most people make. It can be a frightening time for some, and for others it can be a bit of a mystery. Most of the time the real estate transaction proceeds as anticipated -with few surprises. There are always some surprises, so if you just have a few you are doing well. Every once in a while, it turns out that some one was hiding something important from the purchaser. Maybe it’s a flooding back yard, or a leaking basement, or a very unreliable septic system. Perhaps the well water quality is not uniform, of the home siding material is failing. Or perhaps the seller has reason to believe that the old buried oil tank is or has leaked. As I said, these deceptions are the exception. Most people are honest and if there has been a mis-communication, it’s a result of honest error and nothing more. But in those cases where someone has actually lied to you about something that is significant, you may the victim of fraud. Courts provide relief for fraud victims. Fraud occurs when someone intentionally deceives you about an important fact - that you have reasonably relied upon to your detriment, which has resulted in injury or harm to you. In a real estate transaction, when fraud does occur it is usually undertaken by the seller or the real estate professional. However, anyone who deceived you to your detriment may be liable for fraud. In evaluating a fraud case, the first question is whether the target knew or should have known that what was being said ( or withheld) in fact was untrue. Some times neighbors will tell you. For example, a neighbor may say, "Fred knew about the flood problem in the basement. He used to complain to be me about it all of the time." Old permits or repair records may give away the truth. "How can Fred claim not to know the basement flooded when he called two plumbers out to try to stop the flooding." Insurance claim records may also do the trick. "Fred says he didn’t know about the flooding, but three years ago he filed a basement flooding claim with his insurance company." The lie has to be significant. It has to be the kind of lie that might change the purchase decision if the truth had been know. Small lies are usually not actionable. And for there to be fraud –you had to have reasonably relied on the lie to your detriment. In other words, you must show that your position has changed for the worse because of the lie. Your reliance must be reasonable. A lie that you could not have reasonably relied on is usually not fraud. For example, if it is visually obvious that the home is in a flood zone, it might not be reasonable to have trusted a seller who insisted that he or she never experienced a flood threat or problem. Finally, for there to be fraud you need to have been harmed by it. Usually, this is in the form of monetary harm. But other harms, including physical harms, work as well. If someone tried to defraud you but it caused no harm, then the attempt to defraud you was a failure. Without harm, there is no fraud. Fraud cases tend to be hard to prove because they are very fact dependent. In many states, a person who proves fraud may receive attorneys fees and punitive damages - damages designed to punish the wrong-doer. A close cousin to fraud is negligent misrepresentation. This is exactly the same as fraud except there does not have to be an intent to lie. A lie resulting from negligence will suffice. Hopefully your real estate transactions will be trouble free. And they usually are. But if some one deliberately deceives you, you may have legally protected rights. Act promptly, the law often provides a short time period for taking legal action, after which you will not longer be able to do so.
The information provided in this column is written by Stuart Lieberman,a practicing environmental attorney, and is for general information purposes only. It is not legal advice and should not be used in place of legal advice.
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