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Unfair and Deceptive Acts and Practices: 8.2.8.4 Landlord Seizure of Evicted Tenant’s Possessions

A moving and storage company engaged in UDAP violations where it negligently held a tenant’s property after a sheriff contracted with it to move the contents of the tenant’s apartment.131 Among its deceptive practices were selling the collateral before the time specified in a notice to the tenant and allowing items to be broken and stolen.132 Similarly a landlord commits a UDAP violation by selling a tenant’s property without a valid lien.133

Unfair and Deceptive Acts and Practices: 8.3.2 UDAP Violations Concerning Title, Financing, and the Homeowner’s Legal Rights

A broker commits a UDAP violation by misrepresenting the interest rate of a mortgage,176 or failing to disclose that low-cost financing is subject to conditions and restrictions that will make it difficult for the home buyer to qualify.177 It is be deceptive for a seller to state that it will arrange a title search and title insurance and fail to do so, leading to damage to the purchaser because the title is not clear.178 It is a UDAP violation for

Unfair and Deceptive Acts and Practices: 8.3.3 Special Issues Concerning Home Inspectors

Home inspectors have been found liable for UDAP damages for faulty reports.185 A particularly interesting case exposed a home inspection company’s conflict of interest, which led it to soft-pedal defects in order to avoid derailing the sale of the home and antagonizing the realtors on whom it relied for referrals.186 Home inspectors have sometimes been involved in fraudulent property flipping schemes.187

Unfair and Deceptive Acts and Practices: 8.3.4 Special Issues Concerning Real Estate Agents and Brokers

Brokers must disclose any financial interest they have in a real estate sale.189 It is deceptive for a broker who is representing the seller to purchase the property without fully disclosing all material facts to the seller, including other purchase offers.190 A real estate agent who is also a local public official and who misuses their public authority to effectuate a sale to the consumer’s detriment commits an unfair practice.191

Unfair and Deceptive Acts and Practices: 8.3.5.2 UDAP Precedent

A Maryland decision holds both a loan officer and an appraiser liable to the home buyers in a property flipping scheme.211 The loan officer met with the speculator at the beginning of the scheme, advised the speculator about how to secure FHA loans for the home buyers, and gave them paperwork to use to falsify the source of down payments and closing costs. The loan officer then worked with the speculator to generate inflated sales prices.

Unfair and Deceptive Acts and Practices: 8.3.5.3 Other Causes of Action

Civil conspiracy claims are especially worth investigating in property flipping cases as ways of reaching people who enabled the scheme to succeed but did not deal directly with the buyer.223 Discrimination claims may also be appropriate if the speculator targets a protected class.224 Claims under the federal Credit Repair Organizations Act,225 a state credit repair law,226 or a federal or state RICO

Unfair and Deceptive Acts and Practices: 8.3.6.2 Investigating Appraisal Fraud

Since the consumer usually has limited contact with the appraiser, the appraiser’s involvement in the fraud may not be obvious. A thorough investigation is therefore necessary. Investigating the facts surrounding the appraisal may also reveal how others—those who arranged for or used the appraisal—are tied into the fraud.

Unfair and Deceptive Acts and Practices: 8.3.7.1 Misrepresentations Concerning the Home or Work to Be Performed

It is deceptive to misrepresent that homes are built in accordance with good construction practices, that they meet HUD minimum standards, that they are free of structural defects, that there are no drainage or water problems, that parks and public transportation will soon be built nearby, or that the homes are ready for immediate occupancy.256 Charging extra money for rooms included in the advertised description and selling “bedrooms” that do not have sufficient insulation and waterproofing to serve as bedrooms are also deceptive practices.

Unfair and Deceptive Acts and Practices: 8.3.7.2 Performance Problems, Contracts, Warranties

A home builder commits an unfair and deceptive practice by taking a deposit, never starting the work, and refusing to return the deposit.272 Allowing cost overruns to build up without informing the home buyer is a UDAP violation.273 Billing for work not included in the bid, and failing to perform services for which the consumer has paid, are UDAP violations.274 But a lender was not liable for disbursing funds after its inspection showed that the wo

Unfair and Deceptive Acts and Practices: 8.3.8 Land Fraud Schemes

The FTC has been active against land fraud schemes for not disclosing the risks involved in land investments, such as that property is in a flood area or that water and sewage are unavailable.292 It is unfair and deceptive for sellers to misrepresent the availability of utilities,293 the location of lots,294 the quality of land,295 the condition of planned development,

Unfair and Deceptive Acts and Practices: 8.3.9 Timeshares

New Mexico has UDAP regulations dealing with contest promotions for the sale of subdivided land, timeshares, condominiums, and membership campgrounds.316 A Missouri regulation deals with promotions of timeshare plans.317 Vermont UDAP regulations relate to offers of supposedly free travel packages used in timeshare marketing.318 Other states have separate statutes regulating this area.319

Unfair and Deceptive Acts and Practices: 8.4.1 General

The sale of home improvements, such as residential siding, roofing, windows, and basement waterproofing, may display a wide array of UDAP violations. Some consider home improvement scams the classic form of consumer abuse.

Unfair and Deceptive Acts and Practices: 8.4.4 Building Permits and Construction Standards

Failure to procure a required building permit is a UDAP violation.372 A Massachusetts court held that a homeowner’s alleged oral instructions to a contractor to install a new roof on top of an old roof in violation of the building code would not be a defense to a UDAP claim based on that violation, where the written contract required the old roof to be stripped off and failure to do so created safety issues.373 It was a jury question whether the cost of redoing defective home improvement work th

Unfair and Deceptive Acts and Practices: 8.4.5 Pricing Issues: Unconscionability, Unauthorized Charges, Misrepresentations

Unconscionable prices may be a UDAP violation where little or no services are actually provided and the consumer is given no real alternative, or where the dealer has advertised that it charges low prices.375

The seller may not change the price or the nature of the work to be done without the buyer’s authorization.376 Nor may contractors represent that a house can be repaired within the limits of an insurance policy when it cannot.377

Unfair and Deceptive Acts and Practices: 8.4.7 Credit-Related Practices and Lender Liability

The Truth in Lending Act makes most home improvement loan and installment contracts cancelable by the consumer for three business days and rescindable for up to three years if material disclosures are not provided or work is commenced during the three-day cancellation period.389 For certain high-rate home improvement transactions that involve a security interest in the consumer’s home, the Home Ownership and Equity Protection Act (HOEPA) prohibits certain abusive credit terms and practices.390 I

Unfair and Deceptive Acts and Practices: 8.5.1.1 Problems Facing Users of Unregulated Fuels

While states typically regulate the provision of natural gas and electric heat,399 there is little or no regulation of the sale of such heating fuels as oil, propane, kerosene, and wood. This particularly puts at risk manufactured home residents, those living in rural areas, and tenants in older northeastern housing. Practitioners may find state UDAP statutes their only remedy to deal with abuses in the sale of these unregulated fuels.