Thursday, July 10, 2014


The author of the email was The Home Equity Theft Reporter and offered a  "helpful starting point for additional legal research in an effort to void certain abusive real estate transactions involving unwitting, financially strapped homeowners who have been screwed out of the equity in their homes by unscrupulous real estate operators."

But the warnings should also be utilized by those representing buyers of residential homes whether from unscrupulous real estate operators or simply in the situation where possession of the property is by an occupant other than the seller/vendor - even with a title company doing a search, etc. - can a buyer (or mortgagee) otherwise be charged with notice of the fraud thereby making bona fide purchaser/encumbrancer status unavailable to them.

See City of New York v Brooklyn LLC 2009 NY Slip Op 52722(U) [26 Misc 3d 1215(A)] Decided on December 18, 2009 Supreme Court, Kings County Velasquez, J.:

"Third, the Court also finds that defendants conducted what appears to b e the standard search recognized by the Second Department in Andy Assoc. — that is, a thorough review of the block and [*7]lot index for the Property and all associated documents. Nothing in those searches would have given rise to inquiry notice particularly since the plaintiff City, itself, recognized lot 127 as being privately owned and therefore taxable. Although there was a Notice of Pendency filed against the Property in 1996, it expired by its own terms three years later, and nothing was recorded thereafter by plaintiff. An expired Notice of Pendency provides no notice at all. See, CPLR §6513, and DaSilva v. Musso, 76 NY2d 436, 560 NYS2d 109 (NY 1990). Defendants, herein, were only chargeable with knowledge to make a diligent search "if reasonable facts excite suspicion and one fails to make some investigation". Fischer v. Sadov Realty Corporation, 34 AD3d 630, 824 NYS2d 434 (2nd Dept. 2006). In the instant matter, the Court finds no facts which would have reasonably excited suspicion.
Fourth, the Court finds that both of plaintiff City's experts were well informed as to what interest the City hoped to find, and therefore conducted searches outside of what the Block and Lot recording act contemplated as reasonable, and where no credible facts constituting reasonable inquiry notice were to be found. Accordingly, the defendants' motion for summary judgment pursuant to CPLR§ 3212 is hereby granted dismissing this action on the ground that Brooklyn LLC is a bona fide purchaser with respect to its interest in the Property, and that reasonable searches were conducted by defendants' title searchers, which did not and could not have uncovered plaintiff's unrecorded interest in lot 127. Plaintiff's claims against defendants are hereby dismissed in their entirety."

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