Officials in San Bernardino County are warning residents of a nationwide property scam that is tricking homeowners into assigning a lien on their property in exchange for an upfront cash payment.
A Florida-based real estate company operating a nationwide network is currently advertising and offering homeowners up to $5,000 cash in return for the homeowner signing up for what is called a “Homeowner Benefit Agreement.”
The shady agreement gives the company the exclusive right to serve as the listing agent, receiving a 3% commission when the homeowner decides to sell their home.
When the agreement is signed, the company files a memorandum lien with the county Recorder’s office.
Here’s the catch: the agreement lasts for 40 years and is attached to the property, not the homeowner.
If a homeowner dies or gifts the property to another, the heir or new owner is obligated to the terms of the contract. If the homeowner wishes to cancel the agreement or avoid listing their property with the real estate company, they must pay an early termination fee equal to 3% of their home’s current value.
The program is presented as a listing agreement, but what it boils down to is a loan with an astronomical interest rate.
The county is urging residents to be careful when being approached by companies that offer real estate services and benefits that sound too good to be true.
