Consumer Protection

How to Protect Yourself: Land Sales Scams

Source: Florida Attorney General's Office


Owning land is part of the American dream. Many consumers think that purchasing land is a safe investment. However, many are disappointed and come to realize that their dream has turned into a nightmare. For those who purchase worthless lots a second scam may lie ahead. Many scam artists contact consumers with worthless lots. They try to obtain advance fees for selling the lots to foreign investors. Before purchasing land or paying an advance fee for the sale of your lot consider the following:

Be wary of the hard sell.

Promises of a wonderful investment opportunity that can't fail should rouse your suspicions. In any investment, there is always a risk. Be skeptical of slick brochures that portray booming communities and do your research.

Before purchasing land take the following steps:

  1. View the property. Do not buy land over the phone or by mail or email. Talk to residents who live in the area.
  2. Look into the amount of all fees, such as real estate taxes, or community assessment fees.
  3. Meet with real estate agents in the area to find out the market for this property. Ask the agent how long it would take to sell the property if it became necessary.
  4. Check with the county planning office to learn of plans for the land or property near this area that may affect land value. It would be important to know if an airport or dump is scheduled to be built in the future.
  5. If the land is undeveloped, know who will be responsible for the costs of building roads, utilities or sewers.

Research the builder or sales agent.

Contact the federal Department of Housing and Urban Development (HUD), your local and state consumer protection office, the Better Business Bureau and state agencies that regulate real estate salespersons and contractors to learn if there have been any complaints. Find out the length of time the company has been in business. Research the public records to determine if there have been any civil actions brought against the salesperson or the developer.

Obtain a copy of the property report.

Pursuant to the Interstate Land Sales Full Disclosure Act, every developer selling or leasing more than 100 lots through interstate commerce must register with HUD. The developer must provide a copy of the disclosure statement called a "Property Report" to the consumer before a contract is signed.

Beware of any company claiming to have an unbeatable deal for you.

Do not send advance fees to land sales companies who promise to sell your lot to foreign investors. Many investors who have purchased lots that they cannot sell often fall prey to the advance fee scam. These investors often receive a postcard with promises of an imminent sale of your lot after the payment of an advance fee. Be advised that if you can’t sell your undesirable lot, it is unlikely the sales companies will find a buyer for it.

File a complaint.

If you believe you have been the victim of a land sale scam, file a complaint with the Attorney General’s Office online at www.myfloridalegal.com or by phone at 1-866-9-NO-SCAM.