Legal Aid to hold town meeting Aug. 27 on land-contracts scam

Legal Aid and Defender Association (LAD) will hold a free public meeting to warn and educate residents of Detroit about the dangers of purchasing homes on land contracts in Detroit and Wayne County on Aug. 27 from 10 a.m. to 1 p.m. at Plymouth United Church of Christ, 600 E. Warren Ave.

The meeting will feature a panel of speakers who will discuss land contract law in Michigan as well as answer questions from residents. LAD Attorneys will be present to provide advice to individual residents regarding land contract issues.

Currently, LAD is representing victims of what appears to be a major residential property scam in the city and the county. Out-of-state companies appear to be in the business of buying thousands of foreclosed homes for as little as a dollar each, then selling them to residents on land contracts for thousands of dollars without informing purchasers about past-due property taxes, utility bills or other liens on the homes that become the responsibility of the new owners. In some cases, this can mean that the new owner owes several thousand dollars in taxes and utility bills on the home.

LAD has filed a lawsuit in Wayne County Circuit Court in such a case claiming damages of more than $25,000 and is preparing to file additional lawsuits on behalf of other purchasers of these land contracts.

LAD has learned that these companies may be involved in similar operations in Cleveland and other major U.S. cities.

"We have opened several of these cases in recent months, which usually indicates that there could be hundreds of residents in Detroit and Wayne County who are victims of this scam," Deierdre L. Weir, LAD president and CEO, said. "We want to get the word out to residents to be on the alert if they are purchasing a home on a land contract."

There is nothing illegal or wrong with selling a home on land contract, Weir stressed. "What's important is that a title search takes place before the purchase to make sure there are no liens or prior financial responsibilities that will become the responsibility of the new owner," she said.

Published: Fri, Aug 19, 2011

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