Misrepresentation | Noncompliance with Disclosure Requirements | Licensing Violations

The purchase of a new home probably will be the largest financial transaction most peopleenter into. Real estate deals are complex, and most buyers put their trust in real estate agents and brokers to ensure that they get the terms they expect. Unfortunately, broker or agent fraud is far too common. Here are some typical examples of fraud by real estate agents or brokers.

Misrepresentation of a Material Fact

A broker or agent commits fraud or misrepresentation if he or she intentionally makes a false assertion of fact. A broker mightmisrepresent the age of a house, the size of the property, or prior uses of the buildings and grounds. An agent or broker also might make false statements about his or her qualifications, experience or licensing, and may even provide fake credentials. You should pay particularly attention if there’s only one agent involved in the transaction. That person may intentionally make false assertions about the property to boost the sale price, as they usually stand to collect a percentage-based commission on the sale.

Failure to Provide Appropriate Disclosures

Brokers and agents are legally required to provide certain basic disclosures to both buyers and sellers. For example, an agent or broker must disclose to a potential purchaser any known defects toeither land or structures.

It’s important to understand that a real estate broker or agent owes you a fiduciary duty. That requires them to be honest in all dealings with you and make decisions in your best interests, not theirs. Be careful that your agent or broker doesn’t:

• Fail to inform you of all offers made or whether an offer has been accepted
• Make, reject, or accept an offer without your approval, or
• Receive any fees or profits that are not disclosed to you.

Contact the Law Offices of David J. Karbasian, PC

Send us an e-mail today or call us at 856-667-4666 / 856-600-HURT to schedule an appointment.

Evening and weekend meetings can be arranged upon request. We’ll come to your home or the hospital to meet with you, if necessary.

The Protections Provided by the New Jersey Consumer Fraud Act

It seems there are few things in life more challenging, frustrating and often unsatisfactory than home improvement projects. It doesn’t seem like it should be that complicated, but home remodeling and improvement efforts are frequently rife with delays, shoddy work, mistakes and outright fraud.

In New Jersey, there’s good news—there’s a law that specifically applies to home improvement agreements. It can give you the legal tools you need to combat unnecessary delays, construction defects, disputes over performance, and overcharging.

What Is the New Jersey Consumer Fraud Act?

The New Jersey Consumer Fraud Act (NJCFA) is a written law, applicable to the sale of goods, services and real estate, that bans “unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission of any material fact.” The courts in New Jersey have held that home improvement contracts are particularly prone to instances of consumer fraud. Accordingly, extensive regulations have been adopted governing home improvement contracts. For example, the NJCFA requires that all home improvement agreements and any change orders be in writing and signed by both parties. Contractors must also provide detailed information, including, among other things:

• A contractor registration number
• A telephone number for the contractor’s insurer
• A description of work to be done and materials to be used
• The total purchase price, including any finance charges
• The date the project will begin and the date it is expected to be completed
• A written copy of any warranty or guarantee offered
• Notification of the customer’s three-day right to cancel

The Requirements for a Legal Claim under the NJCFA

To prevail on a claim under the New Jersey Consumer Fraud Act, you must show three things:

• The contractor engaged in an illegal or prohibited practice
• The engagement in that act caused you to suffer losses
• Your losses can be ascertained

The act may involve affirmative conduct, a known omission or failure to act, or a violation of an administrative regulation.

Contact Attorney David J. Karbasian

Contact our office online or call us at 856-667-4666 / 856-600-HURT to schedule an appointment. Your first consultation is without cost or obligation. The sooner you call, the sooner you can move forward with your claim. We can accommodate evening or weekend meeting requests and will come to your home, if necessary.

When you’re buying a house or refinancing, you want to get the best deal possible, but you also need to be careful to avoid fraudulent mortgage lending practices. Here are some basic guidelines to reduce the risk that you’ll be taken in by a mortgage lending scam.

Work with Someone You Know or Trust

The best way to steer around potential mortgage fraud is to do business with someone that you know, who you’ve worked with before. If this is the first time you’ve used a mortgage banker, get referrals from people you trust, including family, friends and professional advisors.

Only Work with Someone You Can Meet in Person

It’s been possible to apply for and obtain a mortgage loan online for years, but you always want to know that the mortgage lender has a bricks and mortar office somewhere. If it’s just an e-mail address and a cell phone number, there’s a good chance it’s not legitimate.

Check Out the Lender

There are organizations, such as the Better Business Bureau, who track companies and can tell you if they’ve had complaints filed against them. Don’t be surprised, though, if there’s been at least one complaint filed against the lender—that’s not unusual. But if there are dozens or more, look elsewhere. Furthermore, find out how long the mortgage lender has been in business. If the company is relatively new, find out where their owners were previously, and what they were doing professionally. As a general rule, there’s greater risk in a newer company, but there are always exceptions.

Don’t Sign Anything Unless You Know What It Is

The lender may put a stack of documents in front of you and tell you they’re a “formality.” Take the time to carefully review every document. If you don’t know what it is or what it means, don’t sign it. If necessary, contact an attorney to explain the document to you.

Contact the Law Offices of David J. Karbasian, PC

Send us an e-mail today or call us at 856-667-4666 / 856-600-HURT to schedule an appointment. We handle all personal injury claims on a contingent fee basis. We won’t charge any attorney fees unless we recover compensation for your losses. Evening and weekend meetings can be arranged upon request. We’ll come to your home or the hospital to meet with you, if necessary.

Your House May Be Overvalued and You Might Pay for It

Whether you’re looking to buy a house or refinance, at some point you’ll need to have the property appraised, so that you know how much can be financed using the property as collateral. There can be a tendency, when the appraisal comes in higher than you expected, to decide to finance more, so that you can do some remodeling or pay off some other bills. You need to be careful, though, that the appraisal doesn’t misstate the value of your property, putting you underwater when it comes time to sell.

Appraisal fraud is not uncommon in the mortgage industry. Unfortunately, because of the way the mortgage business works, there’s an incentive for appraisers to “tweak” the numbers, almost always up. Here’s how it works:

• When you contact a lender to finance or refinance your home, you’ll typically get a “good faith” estimate for the amount of the loan, based on purchase price or what you plan to do with the refinance proceeds
• Your lender will hire an appraiser to estimate a fair market value for the property
• Because there are many appraisers competing for work with lenders, there’s an incentive for the appraiser to find a way to meet or exceed the good faith estimate.

Of course, there is a down side for lenders as well. If the appraisal overstates the value of the property and the lender makes a larger loan, the lender could end up on the short side of the deal if the property goes into foreclosure. However, most mortgage lenders sell their mortgages, so they don’t end up facing those types of problems.

As a practical matter, it may be in your best interests to get an independent appraisal, so that you have a realistic sense of what the property is worth.

Contact Attorney David J. Karbasian

Contact our office online or call us at 856-667-4666 / 856-600-HURT to schedule an appointment. Your first consultation is without cost or obligation. The sooner you call, the sooner you can move forward with your claim. We can accommodate evening or weekend meeting requests and will come to your home, if necessary.

The internet has made many things in life much easier…including consumer fraud schemes. Often, what appear to be legitimate offers or transactions are designed only to separate you from your hard-earned money.

Phony Car Ads on Craigslist

A scam that seems to be increasing rapidly involves phony offers to sell goods or services. As a general rule, the goods tend to be bigger ticket items, such as motor vehicles, vacation rentals or high-end electronics, but can involve just about anything. You may find the offers on very legitimate websites, such as Craigslist or eBay, and the “seller” may send you documents or e-mails that appear to be bona fide.

A scam that’s popular right now involves the sale of cars on Craigslist. When you inquire about the vehicle, the “seller” will tell you that the transaction must be run through “eBay Motors” and that you need to make payment with prepaid debit cards or some other alternative method. Don’t ever buy anything that requires you to purchase a prepaid debit card or deliver instant access to cash without simultaneously receiving possession of the goods or services. It’s probably a scam. You should never have to leave eBay or Craigslist or any other website to complete the transaction.

Here are some other red flags related to the bogus online motor vehicle sales scam:

• The price asked for the vehicle is nowhere near its real value—If the deal seems too good to be true, it most likely is. Expect that the “seller” will have a good story to tell you—the car belonged to a family member who died or has been in storage for a number years.
• The seller is in a different state than you are—Craigslist does not give you the option to advertise nationally, as many car websites do. So ask yourself why someone in California would advertise a car for sale on the Craigslist page in Harrisonburg, Virginia. If it’s such a great car and the price is so unbelievable, the seller should have no problem selling it in California.
• The seller offers to deliver the car at no additional cost to you—As a general rule, the buyer pays for the cost of delivery. Again, you may get good stories about why the seller can easily deliver to you at no cost…they travel for business is a popular one. But how will they get back home after they deliver the vehicle to you? Are they going to drive out of their way to deliver a vehicle to you at less than market value?
• The seller pressures you to “close the deal quickly”—this simply indicates that the seller doesn’t want you to take the time to ask the questions above.

Contact Attorney David J. Karbasian

Contact our office online or call us at 856-667-4666 / 856-600-HURT to schedule an appointment. Your first consultation is without cost or obligation. The sooner you call, the sooner you can move forward with your claim. We can accommodate evening or weekend meeting requests and will come to your home or the hospital, if necessary.