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Last Wednesday, Outlier Media published a piece in partnership with NBC News about a scam where people rent out or sell houses they don’t actually own.
The residents I interviewed struggled to hold the scammers accountable. Many lower income Detroiters are forced into parts of the housing market that are less formal because mortgage companies, real estate agents and rental companies are uninterested in lower dollar deals or those they consider risky. That leaves renters and buyers without much of a paper trail.
Victims of the “fake landlord” scam often have their lives upended when they find out the reality of their situations. Some get kicked out of the house. Almost all lose some money. It could be as little as a security deposit and as much as the cost of an entire home.
June Walker, 65, lost even more. For two years, she made monthly payments adding up to $15,000 as part of what she believed was a rent-to-own arrangement but was in fact a scam. She spent even more money and sweat equity on renovations to bring the home up to a livable condition.
On Friday, the eviction case brought by the legal owner of the home, a company called Boccafe LLC, was heard virtually by Detroit’s 36th District Court. The judge ended up postponing her decision until at least January, which Walker’s lawyers say could give her time to negotiate the purchase of the house.
“There has been quite a bit of publicity concerning this case, which has drawn donations from across the country,” Walker’s lawyer, Marilyn Mullane told Judge Alicia Jones-Coleman. That assistance, Mullane said, means Walker could now have the resources to buy the house.
But Randy LeVasseur, representing Boccafe, told Mullane that his client is more interested in keeping Walker as a renter instead of selling the house. Mullane is hoping they’ll be able to come to an agreement between now and the next court date.
“She’s just put so much into this place; that’s where she wants to be,” Mullane said. “And the only solution that keeps her there permanently is a sale for a reasonable price.”
Boccafe is a Florida company registered to Alberto Carlos Garbesi and Carlos Alejo Garbesi, which lists, as the official business address of the company, a condo in Miami Beach worth more than $1 million. The company currently owns 16 properties in Detroit, all of which it purchased since December 2019, and has filed four eviction cases at the 36th District Court.
Despite Boccafe’s initial offer, Walker remains hopeful.
“Life throws curves at you,” she said. “You can either give up, check out, or deal with it. I’m not about to check out.”
She added that the issues in the case are bigger than her.
“How many people just in Detroit alone have been played like that?” she said. “It is time for something to be done.”
Michigan Attorney General Dana Nessel issued a press release in response to the article that included a form for how to file a consumer complaint.
Whomever scammed Walker has gotten away with it. The paper trail is so broken that Walker doesn’t know who, ultimately, she paid.
Janell Poydras, 27, of Detroit is in a similar situation and unsure whether he wants to do more to hold his scammer accountable. In 2019, Poydras began renting a home near the Coleman A. Young International Airport on the city’s east side. It was the first time he had ever rented on his own, and he didn’t sign a lease with Ronald Jones, the man who claimed to be the owner.
The house didn’t have heat or running water in the kitchen and one of the bathrooms. Jones said he would fix the issues but didn’t.
Eventually, Poydras’ girlfriend, Erika Phillips, moved in with the couple’s six kids. Phillips had more experience as a renter and knew something wasn’t right. From the start, she suspected Jones may not really own the house or be a legitimate landlord. Phillips had a real estate agent friend look up the deed, which is how they found out the property was not registered to Jones.
Poydras confronted Jones with this information and told him that he would withhold rent until repairs were made. Jones threatened to “shoot up the house,” according to Poydras.
The couple left the house soon after. Poydras went to jail, and Phillips moved in with her mother. Phillips said she still went over every day to check on the place and the dogs they had kenneled there. After about a month away, Jones changed the locks and refused to let them back in.
Changing the locks rather than taking Poydras to court is considered a “constructive” eviction, and it cost Poydras and Phillips a lot. The couple lost the security deposit, numerous belongings and two of their puppies, which froze to death in the unheated house. Jones then continued to use the utilities in Poydras’ name, racking up bills that Poydras is still trying to resolve with DTE.
“I’m still angry about it,” Poydras said. “It had a huge negative impact on our lives for a while.”
In reporting this story, I wanted to get in touch with the actual owner of the home to find out whether he was aware his property was being used illegally. According to the register of deeds, the owner at the time was Deatrice Reed, and he had several properties registered to his name in the neighborhood. So, I went knocking on doors. Someone said they knew Reed and would have him give me a call.
Five minutes later, while leaving the neighborhood, I got a call from someone claiming to be Deatrice Reed. Strangely, the caller ID read “Darnell Jones.” He gave a convoluted story about selling the home to Ronald Jones, but, for reasons he couldn’t explain, he never recorded the sale at the Wayne County Register of Deeds.
Reed couldn’t provide any evidence for his claims and got details of his own story wrong, like the year he bought the house and even who he bought it from. He declined to meet in person and said he did not want to comment further. Given that I couldn’t verify Reed’s identity or the information he provided, he wasn’t included in the first story. He didn’t respond to further attempts to contact him.
The difficulty in untangling the ownership claims of this Detroit home illustrate how time consuming and confusing the process can be.
Stopping the scam
Poydras doesn’t trust the police so he never got them involved. While the Detroit Police Department told us it is pursuing a deed fraud investigation involving Land Bank homes, the department didn’t respond by the time of publication to a Freedom of Information Act (FOIA) request asking for documentation.
The Wayne County Prosecutor’s Office has a Mortgage and Deed Fraud Unit specifically dedicated to pursuing cases against real estate scammers, fielding well over 1,000 complaints a year. But in 2019, just 14 cases ended in conviction.
If journalists, attorneys and the authorities struggle to track down the origins of these scams, how is the average Detroiter supposed to protect themselves?
Another victim of the scam, who did not want her name used, thought she had bought a home that was actually owned by the Land Bank. She went with her scammer to a number of official places to fill out paperwork, including the Register of Deeds, her bank and the Office of the Assessor.
Detroiters often buy homes in cash. These transactions can be much riskier because, unlike a traditional mortgage, the buyer is not obligated to get title insurance, which would spot an illegal sale.
Housing advocates and attorneys say renter and homebuyer education is the best defense against this scam.
“Scammers know people have a lack of knowledge and use that to their advantage,” Phillips said.
A mortgage is the most secure way to purchase a home, since it has to be underwritten by a bank or guaranteed by the government. But for those who have to buy in cash, title insurance is a necessity. While title insurance can cost hundreds of dollars, the title company will ensure that the person selling the home really is the owner and that there are no other outstanding ownership claims.
All prospective renters should inspect the home beforehand and get guarantees from the landlord to fix any issues. If they decide to rent, they should sign a lease and have the landlord provide invoices for rent.
The Attorney General’s office has more recommendations for people to protect themselves against housing scams.
Because enforcement of real estate crimes is lacking, on-the-ground oversight often falls on local residents and neighborhood associations. Grandmont Rosedale’s Vacant Property Task Force was founded in 2009—at the beginning of the housing crash—to keep an eye on vacant homes in their northwest Detroit neighborhood.
Pamela Weinstein, a former Grandmont Rosedale Development Corp. employee and a member of the task force since 2013, said keeping tabs on the vacant homes in her neighborhood is constant work.
“There isn’t much the police can do to help you,” Weinstein said. “So we’ve learned through years of work that you have to find who the property owner is and get them to take responsibility.”
The all-volunteer task force cleans up the exterior of homes so they’re presentable and safe, holds owners accountable for maintaining their property and keeps an eye out for scammers. They’ll call the city to issue blight tickets and patrol the area regularly. It even worked with Wayne County’s Mortgage and Deed Fraud Unit to prosecute a scammer.
But cases where a perpetrator of a housing scam is held accountable are rare.
“The main thing that I’ve learned, which is really maddening and infuriating, is that if I steal your car or wallet, that’s a criminal offense, and I’ll be tried in a criminal court,” Weinstein said. “But if I steal your house, it’s not a problem.”
If you’re interested in helping Walker, reach out to Jolayne Thompson at the United Community Housing Coalition by email at email@example.com.
Reach AARON MONDRY at firstname.lastname@example.org or 313-403-7221.
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