Recently I visited a New Zealand web site which issued a Shark Alert - not of the killer finned kind but of the property fraudster variety.
It warned of scams going on Australia's Gold Coast area, and issued a few pointers on what to look out for;
It advises that the properties are likely to be overpriced and you can be given false "investment analysis" showing inflate capital growth rates in the area . Rental return in the area may be exaggerated to attract buyers and the initial deposit would be enticingly small .
If your property is in an apartment building or housing complex, you will belong to a "body corporate". This is similar to a management company here and is responsible for the shared costs of running the building or complex. "We've heard of body corporate charges that have more than doubled in just three years." says the web site. Other conmen have misled buyers about the facilities they should expect in a new scheme ie swimming pool, gym, landscaped - which somehow never get built.
hmmm.. Overpriced property and exaggerated rental return figures? Service charges spiralling after three years of a scheme being built? It appears one country's scam is another's country's property market.
The New Zealand website advises that are often two price lists for exactly the same apartments, with prices on the "visitors" list far higher than those on the "local buyers" list.
It advises consumers to beware of A "free" seminar that promises to turn you into a millionaire who can "give the boss the boot" should be treated with suspicion. Presenters have to pay for airfares, conference rooms and living expenses somehow. They usually manage to do so by flogging you high-priced books, tapes, "advanced" seminars and so on.
This is a scenario not exclusive to Australia. When an Irish person buys property abroad, it is entirely possible they are paying the "visitor" price rather than the "local" price. It can happen if an investor bulk buys apartments in a scheme and resells them in Ireland at a substantial profit. To guard against this it makes sense to visit the scheme you intend to buy into and compare prices with surrounding developments. Find out if a local estate agent is selling apartments in the same scheme and for how much.
People can be taken in by the high pressure sales pitch on organised whirlwind trips and may not stop to do important research.
Find out from the local planning authority has plans to build on nearby land.consult an independent lawyer, seek an independent valuation of the property and, if dealing with a property investment company, talk to the company's previous customers.
In Spain a local council can CPO your land for a local building schemeand is not obliged to pay compensation. In Italy if a property is sold, the locals will often have first option on the lands, so if you purchase a rustic farmhouse on several acres - make sure that's what you actually get.
In Budapest you have to watch out for the apartment mafia who dupe people into buying property that was never for sale.
Further afield in Costa Rica,squatters are entitled to immovable and immediate rights. One common scam is to sell out-of towners a beautiful and vacant Costa Rica property and when they come back it is taken over squatters, The salesman will invariably offer to buy the property back at a fraction of the original cost , then moves the squatters off land and repeat the process
In Malaysia there have been nine recent cases of land title deed ownership being transferred to unidentified individuals. In one case an 88 year old woman realised a two acre plot of land now belonged to someone else. She only learnt of the fraudulent transfer when she tried to obtain a replacement grant, as her documents were old and tattered.
In Australia property fraud appears to be rife. One scam is investors buying a property on cheap land in the bush in Southeast Queensland and then sell it on to someone who would not normally get a bank loan a higher price.
The investor makes a profit on the property sale and by charging a higher rate of interest to the buyer but the buyer does not get the deeds to the home or land until they have repaid the whole price.
If they default even once, they can be thrown out and lose everything.
The Australian Competition and Consumer Commission. has turned the heat up on giving misleading sales seminars, and those trying to lure investors through e-mail spam, direct marketing, telemarketing and even door-to-door sales. There are Internet sites that print lists of timeshare companies all over the world that allegedly defraud consumers.
The hard sell hasn't been necessary in this country with a relatively buoyant property market for some years . However if the property market were to slow significantly could that situation change?
