A half-acre lot in Fairfield, Connecticut had been in the owner's family for generations. The owner, a Long Island, New York, resident, returned to Fairfield in the spring of 2023 only to find that a house had been built on his property.

A person with forged papers claiming to be the owner had "sold" the wooded lot for $350,000 to a developer. Connecticut has seen 11 imposter cases so far this year, more than double the cases last year.

The developer built a house on the lot and sold it to the new owners, who were unaware of the fraud. In the suit that followed, the original owner sued the lawyer involved in the sale of the land and the builder of the house. His federal lawsuit sought two million dollars in damages. He also sought demolition of the structure to restore the lot to its old condition.

The builders, in turn, also sued, in state court, the lawyer as well as the real estate company and agent who listed the land for sale back in 2022.

In the end, the parties settled. The original owner received an undisclosed sum. The developer and builder received a clean title to the land and were able to finish the house, selling it to the new owners for $1.45 million dollars.

As for the criminal investigation into the scammer who claimed to be the original owner, the FBI has no leads. "Dan Haar: A resolution in battle over $1.5M Connecticut home at heart of shocking real estate scam" www.ctinsider.com. (Jul. 08, 2024).

Commentary

This is an example of a fraudulent crime that affects many parties. In this case, the realtors who sold the undeveloped property were the victims of fraud, which led to them selling the property to the builders and then to the ultimate buyers.  All of these were secondary victims of the original fraud.

One of the fastest-growing real estate scams targets vacant or unoccupied houses for sale.

Minimize the risk of liability to your real estate firm by creating and following protocols to establish the identities of all parties in a transaction.

The following may be warning signs of fraud:

• If a seller tells your agent they only want a cash buyer, or will not show up for closing or ask to sign documents electronically.
• If the seller asks for a remote notary at signing or wants to use their own notary.
• If the seller asks that the money from the sale be paid directly to them.