Archive

Posts Tagged ‘bid rigging’

Legal Update for Real Estate Investors: Fraud, Harassment, and a Bill to Penalize Falsely Representing Need for a Service Animal.

December 19, 2017 Leave a comment

 

A beautiful end to Tuesday.IMG_2014

Here’s a profound truth those in the real estate industry will readily acknowledge:

Owning and Managing Real Estate is uniquely challenging.

 

I hear it from my Property Owner/Manager clients. I experience it when I am involved in negotiating in landlord/tenant disputes.

If you own or manage investment real estate, you are involved in messy business.

 

I believe that is why, at least in West Michigan, there is an opportunity for good property management companies – and a handful of companies I work with locally do it really well.

DOJ Sues Landlord for Sexual Harassment Allegations

Some of the pitfalls property owners/managers have to watch out for are illustrated in a recent press release announce by the Department of Justice.

Yesterday the Department of Justice announced that it filed suit against Owners and Managers related to allegations of sexual harassment in Kansas properties.

According to the press release, the owner and manager:

 

sexually harassed female residents at the rental properties from at least 2010 to 2014.  According to the complaint, Thong Cao engaged in harassment that included, among other things, making unwelcome sexual advances and comments, engaging in unwanted sexual touching, and evicting tenants who refused to engage in sexual conduct with him.

 

Sexual harassment is a violation of several Federal and State laws.

 

Georgia Real Estate Investor Sentenced to 16 months in Prison

Today, the DOJ announced that a Georgia Real Estate Investor was sentenced to 16 months in Prison for bid rigging public foreclosure sales.

According to the Press Release:

The evidence at trial showed that Purdy and his co-conspirators agreed not to compete for residential real estate at foreclosure auctions in Forsyth County and defrauded lender banks and homeowners.  Among other methods, the conspirators held secret “second auctions” of properties, dividing among themselves the auction proceeds that should have gone to pay off debts against the properties and, in some cases, to homeowners.

 

In today’s real estate market, bidding is competitive. If you are asked to take part in anything like this at your local sheriff’s sale – DON’T DO IT.
Lying About Emotional Support Animals, a Crime?

 

Michigan Law requires a public accommodation to permit the use of a service animal by a person with a disability.

Among other things:

“A public accommodation shall not ask a person with a disability to remove a service animal from the premises due to allergies or fear of the animal. A public accommodation may only ask a person with a disability to remove his or her service animal from the premises if either of the following applies:

(a) The service animal is out of control and its handler does not take effective action to control it.

(b) The service animal is not housebroken” MCL 750.502c

Landlords and property owners should heed the warning of General Deputy Assistant Secretary Bryan Greene of the U.S. Department of Housing and Urban Development’s Fair Housing and Equal Opportunity.

“Many people with disabilities require the assistance of an animal to carry out major daily activities,” said  “Complaints alleging disability discrimination now account for the majority of the complaints HUD receives. HUD will continue to enforce the law and educate the public on the rights of people with disabilities in housing.”

.

However, a Michigan Senate bill proposed on November 28, 2017 would make it a crime to falsely represent the need for a service animal to a landlord. Violation would also give right to a Landlord to evict such tenant.

 

This is an interesting bill. I look forward to seeing if it gains any traction.

 

 

Two takeaways from this news headline:

 

1. It is worth being proactive and engaging legal counsel. 

Issues arise. When in doubt, e-mail or call your attorney.

 

2. Residential Real Estate Investment is highly regulated.

If you are a landlord leasing out “residential” property as opposed to purely commercial property (business tenant), you are under much more stringent regulations. You must comply with Federal laws, like the Fair Housing Act and state laws, like the Michigan Truth in Renting Act. Make sure you are operating lawfully.

 

Questions? Comments?

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

Advertisements

Real Estate Investors: In Your Efforts to Make a Profit Be Wary of Cutting Corners.

October 10, 2017 Leave a comment

Let me illustrate a picture for you: Let’s say you are a real estate investor. You show up for a foreclosure sale. There are several people present to bid on a specific piece of property.  One of those guys winks at you, motions you to come over (in a clandestine sort of way).

The guy whispers to you “I will pay you $500 to walk away not bid on this property.

Red Flags should be going off to you by now. Unfortunately, the same red flags either did not go off or where intentionally ignored for the 63 or so individuals who were targeted for bid rigging at foreclosure sales by the Department of Justice.

“The Antitrust Division has prosecuted scores of real estate investors who, for their own benefit and profit, conspired to corrupt the bidding process at foreclosure auctions.” – Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division

In today’s market, good deals for real estate investors are getting harder to come by. With distressed property becoming a scarce resource and competition ever increasing, some real estate investors have resorted to less than  legal  acts to boost their profit.

2017-09-23 19.30.53Investors should know that the  Department of Justice as well as State Agencies are cracking down on unfair real estate practices.

 

Spartan Stadium. This photo has nothing to do with the post, and is only motivated by Spartan Nation’s victory on Saturday (I took this photo at a different game a few weeks ago)

On Friday, the DOJ announced that Jim

Appenrodt pleaded guilty to two counts of bid rigging in U.S. District Court for the Northern District of California in San Francisco.

 

Investigations Have Yielded 63 Plea Agreements to Date.

 

 

 

 

In Michigan the record numbers of foreclosed properties since 2008 has provided a market (albeit one that is slowing down) for flipping residential real estate. With this opportunity to profit has also created an opportunity for abuse and fraud.  The real estate legal landscape is complex enough, do yourselves a favor – follow the rules.

 

Questions? Comments?

E-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

Cautionary Tale for Real Estate Investors: Yesterday California Investor Sentenced to Prison for Bid Rigging at Foreclosure Sales.

There are many pitfalls for real estate investors who purchase distressed property.

In today’s market, good deals for real estate investors are getting harder to come by. With distressed property becoming a scarce resource and competition ever increasing, some real estate investors have resorted to less than legal  acts to boost their profit.

IMG_1684

Rosa Parks Circle in Downtown Grand Rapids

Investors should know that the Department of Justice as well as State Agencies are cracking down on unfair real estate practices.

 

As a follow up to a story that I have been keeping tabs on, just yesterday, the Department of Justice announced that a judge sentenced a real estate investor for his roles in a conspiracy to rig bids at public real estate foreclosure auctions held in Northern California.

This after a 3-week trial.

 

 

You can see the press release here

 

According to the press release: Alvin Florida Jr. was “sentenced to serve 21 months in prison and to serve three years of supervised release. In addition to his term of imprisonment, Florida was ordered to pay a criminal fine of $325,803.

Based upon the DOJ’s investigation – this was a large conspiracy “to rig bids to obtain hundreds of properties sold at foreclosure auctions. The conspirators designated the winning bidders to obtain selected properties at the public auctions, and negotiated payoffs among themselves in return for not competing. They then held second, private auctions at or near the courthouse steps where the public auctions were held, awarding the properties to conspirators who submitted the highest bids.”

 

What is particularly striking to me is that including today’s sentencing the DOJ report that:

68 individuals have pleaded guilty or been convicted after trial as a result of the department’s ongoing antitrust investigations into bid rigging at public foreclosure auctions in Northern California.

 

Question for Real Estate Investors:

What type of unfair practices do you believe is going on in your state? What are you seeing take place at foreclosure sales?

In Michigan the record numbers of foreclosed properties since 2008 has provided a market (albeit one that is slowing down) for flipping residential real estate. With this opportunity to profit has also created an opportunity for abuse and fraud.  The real estate legal landscape is complex enough, do yourselves a favor – follow the rules.

 

Questions? Comments?

E-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka