Archive

Posts Tagged ‘investment property’

Warning for Real Estate Investors: Three Northern California Real Estate Investors Convicted of Rigging Bids at Public Foreclosure Auctions

 

There are many pitfalls for real estate investors who purchase dIMG_1513istressed property.

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

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

Today, the Department of Justice announced that a federal jury convicted three real estate investors for their 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.

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 convictions 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, including bid rigging, do you believe is going on in your state? What are you seeing foreclosure sales?

In Michigan the record numbers of foreclosed properties since 2008 has provided a market (albeit one that is slowing down) for flipping and rehabbing residential real estate.

This has also created opportunities for abuse and fraud.  The real estate legal landscape is complex enough, do yourselves a favor – follow the rules.

You don’t want to expose yourself to undue liability.

 

Questions? Comments?

E-mail: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

 

Advertisements

New Michigan Bill: Investment Property Owners Should Keep Track of this “Bed Bug Bill”

May 8, 2015 1 comment

Last Thursday a class action case against a Real Estate Owner reached a settlement involving payment of over $2 Million to 100 tenants – ABAJournal reports that story here

One of the primary complaints was that “the 26-unit building had a massive cockroach infestation.

Infestations are an issue for every property manager or owner of residential investment real estate.

A few weeks back Michigan House Bill 4520 was introduced – check out the text here – it would amend Michigan statute governing landlord tenant relationships to include addressing the control of certain pests – including bed bugs.

What the Bill seeks to do:

Impose certain duties on landlords regarding bed bugs:

1. Mandates specifically that the Landlord is to keep the rental space free from bed bugs.

2. Prohibits Landlords from renting out space that the landlord knows is infested with bedbugs

3. Provides specific requirements for a landlord to respond to a complaint of bed bugs:

  • within 7 days of receiving a complaint, Landlord shall order an inspection for bed bugs;
  • within 7 days of confirming infestation, Landlord shall remedy it.

4. Limits damages against Landlord for infestations, not Tenant caused, only if “Gross Negligence”

Impose certain duties on tenants regarding bed bugs:

1. Tenant shall inspect for bed bugs when first occupying the space;

2. Tenant shall not move “infested property” into a rental unit

3. Tenant shall notify Landlord within 2 days of notice of infestation.

4. Tenant responsible for damages due to bed bugs caused by Tenant, or guest.

The Bill would also allow the parties to allocate expenses for inspection and treatment in their rental agreement. If passed into law, this provision will likely lead to Landlords/Property Owners updating their standard rental agreements.

My thoughts:

What happens when the Tenant is the one who brought the bed bugs – causing damage to Landlord’s property?

What happens when Landlord is responsible?

Who pays the costs to remedy?

The presence of bed bugs is a problem. It seems like the Bill is attempting to balance the bed bug problems that is all too routine facing landlords and tenants, particularly in urban housing.

Next step:

The bill was referred to the judiciary committee. It will be interesting to see what outside interest groups weigh in on this bill, and what amendments come out of this.

Questions? Comments?

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Michigan Real Estate Law Update: Proposed House Bill to Allow Tenant’s Waiver of Trial By Jury.

January 26, 2015 Leave a comment

A Michigan House Bill was proposed last week that would allow a landlord in a residential lease to include a waiver of a trial by jury. You can see the proposed bill here

This proposed amendment would revise a portion of Michigan’s Truth in Renting Act, which only applies to residential landlord tenant rental agreements.

Allowing the waiver would certainly serve the interests of landlords/property managers, as well as the efficiency of court resources. As lawyers are well aware, a bench trial, particularly in residential landlord/tenant dispute, can be tried much more efficiently than a trial by jury.

The bill has been referred to the judiciary committee. It will be interesting to see if it comes out intact.

Questions? Comments? 

Jeshua@dwlawpc.com

http://www.dwlawpc.com