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Land Fraud

Whether you're looking for an investment, a vacation home or a place to retire, you need to exercise caution before buying a piece of land. Attractive real estate brochures in the mail may indicate the land is in a warm and hospitable climate with recreation and conveniences nearby.

However, if you don't personally see the land, you may later discover too late that it is in the middle of nowhere, far away from utilities and other amenities, and cannot be resold for even a fraction of the price you paid.

Before buying real estate, a wise and cautious investor should:

  • Visit the property before deciding whether to buy.

  • Get any verbal promises and guarantees put into writing.

  • Obtain a property report from the salesperson or developer.

  • Contact the local Better Business Bureau to determine if there have been any complaints against the developer.

  • Contact a local real estate broker and obtain comparative prices for other plots of land nearby.

The Interstate Land Sales Full Disclosure Act (Title 15, United States Code, Sections 1701-1720) requires full disclosure of all material facts in the sale or lease of certain undeveloped land through the U.S. Mail or interstate commerce. The developers must provide each purchaser or renter with a property report containing certain information before the signing of any contract or agreement for the sale or lease of the land.

To file a complaint or determine if there are complaints on file against a developer, a prospective buyer should contact the Department of Housing and Urban Development's national Office of Interstate Land Registration, 451 7th Street, S.W. Room 9154, Washington, D.C. 20410. Remember, under the law, you have the right to cancel your sales agreement within seven days of signing if you have already seen a property report (you may have more than seven days under some state laws). You also have the right to cancel the agreement within two years if you have not seen the property report before signing the agreement.

If a land developer or promoter has materially misrepresented what he has sold you, you may take legal action to get your money back. If the U.S. Mail was used to promote the land or obtain your money in a purchase or lease transaction, report your experience to your local postmaster or nearest Postal Inspector.