The Florida Bar

How To Safeguard Against Fraud When You Buy Property

Note: This pamphlet is available online only.

Table of contents:

Know the costs
Do your homework
Sales techniques
Getting help

Anyone considering buying property or land should investigate and research the property carefully on a legal basis, on a financial basis and by inspection. This advice applies to any land purchase, whether a single lot or a large tract.

Decisions should be based on facts, not on get-rich-quick promises. Remember that the value of an improved lot depends on the developer’s fulfilling promises as well as other market considerations such as location, growth potential, the general economy and resale value.

As a prospective buyer, you must determine what utilities are available, when they will be available and who will pay for their installation. You should find out the cost of any "special taxing districts" that may have been formed to install roads or provide water, for example.

Know the costs

If your plan is to build a home, then you must explore financing and insurance costs. Fire and flood insurance, for example, may be expensive. You also must examine such possible costs as property taxes or special assessments levied against the property by private and governmental entities. You should thoroughly understand these costs. Inquirer whether the property is located in a flood area. If so, what safeguards exist? Are there adequate drainage facilities to render the property useable for the purpose for which it was offered? Will flood insurance be required and, if so, at what cost? Is the property even buildable? Are there sinkholes on the property? All of these items pose challenges to purchasing land.

If you are buying from a developer, you should not purchase an interest in any subdivision unless you first see and carefully read a public offering statement filed with the Division of Florida Land Sales, Condominiums and Mobile Homes as required by law. A public offering statement is basically a disclosure document for the buyer.

Do your homework

The statement is not a recommendation for or against the property, but it will disclose the physical characteristics of the subdivided land and all of its unusual and material circumstances or features. The statement must include the size and location of the land, and information regarding improvements, zoning and restrictions affecting the use of the land. Any subdivision that is divided or is prepared to be divided into 50 or more lots, parcels or units must be registered. The seller of subdivided land is required by law to deliver a current public-offering statement to each prospective buyer before the prospective buyer signs a purchase contract. You must be afforded a reasonable opportunity to examine the public offering statement before a final settlement, and you can cancel the agreement without cause until midnight of the seventh business day after the purchase contract is signed. You also must sign a receipt for the public offering statement. Never rely on unwritten promises. Everything should always be in writing and signed by the seller if it is to be enforceable concerning the sale of land.

Remember, if you decide to buy land, it is important that you read the entire purchase contract carefully and contact an attorney to review the contract before you sign it. Also, consider obtaining title insurance and a professional survey so that you are aware if anyone else is claiming an interest in the property. If you have any questions concerning any real estate transaction, you should contact an attorney before making a final and binding decision.

Sales techniques

In addition to this general advice about the land itself, there is something to be said about sales techniques. Don’t let sales agents pressure you into making hasty decisions, no matter how intense and skillful the sales pitch. Some agents operate on the theory that, if you have time to think things over, chances are you won't be back.

Some sales agents attempt to create an atmosphere of buyer anxiety by the use of gimmicks. For instance, on a tour of the site, the two-way radio in the sales agent's car may announce loudly the lot numbers that are sold or deposits taken on certain lots. The sales agent may point out to you that these people realize that this is a surefire investment and are buying several lots before prices go up or before the choice lots are gone. Be warned against such sales tactics. A reputable sales agent would not pressure a customer with such hard sell. Statements regarding future price increases should not be an inducement to purchase. If possible, do comparative shopping.

Getting help

If you believe you are a victim of fraud, misrepresentation or deceit in the purchase of any lot in any subdivision, your inquiry/complaint may fall under the jurisdiction of the Federal Department of Housing and Urban Development (HUD). You may direct your inquiry there.

You may contact HUD at or send your complaint to:

Office of RESPA and Interstate Land Sales
Room 9146
Department of Housing and Urban Development
451 7th Street SW
Washington, DC 20410-0001

If you feel that you have been the victim of land sales fraud, in addition to HUD, you may wish to contact the Florida Attorney General's Office, Economic Crimes Unit at .

If you believe you need legal advice, call your attorney. If you do not have an attorney, call The Florida Bar Lawyer Referral Service at (800) 342-8011, or the local lawyer referral service or legal aid office listed in the yellow pages of your telephone book.

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[Revised: 6/11]