Iowa "predatory real estate companies"

Land Investing
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Just saw this from August, sorry if it’s a re-post:

https://www.iowaattorneygeneral.gov/newsroom/land-grab-alert-companies-agree-to-stop-mail-solicitations-of-iowa-farmland-owners

September 2, 2022
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Predatory Land Purchase Companies Shut Down in Iowa
By Land Report Editors
Iowa Attorney General Tom Miller found three companies — Land Acquisitions, CRT Acres, and Westward Landholdings — in violation of the Consumer Fraud Act. After receiving complaints in 2021 and 2022, the AG’s office opened an investigation. The companies mailed unsolicited land purchase agreements to landowners offering a fraction of fair market value and encouraging the recipient to sign and send back for acceptance. Miller expressed concern that the agreement provides no assurance that the landowner has the legal capacity to execute the real estate contract. His office issued a statement that said the solicitation provides “no benefit to the consumer while putting Iowa farm owners at risk of substantial and unavoidable harm.” Owners of all three companies have denied violating the law or misleading landowners but have agreed to permanently cease solicitations within the state of Iowa

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@scottbraden thanks for sharing. Good to know of issues like this when they come up.

It’s interesting to see how these things are perceived. I suppose it depends on how the mail template is worded, but if it’s anything like some of the 1-page blind offers I get, which are very cold and don’t offer much of an explanation about anything, I can see where the Iowa Attorney General is coming from.

One way to avoid issues like this would be not to send blind offers anymore or completely rethink how the offer is presented. Maybe abandoning the concept of blind offers and taking the range offer approach, so it’s not even an “offer” per se, but a neutral letter with some numbers to gauge the seller’s interest.

I am curious to know how this specifically violated the Consumer Fraud Act. Every template I’ve seen (even the poorly written ones) doesn’t make statements or claims about the property’s value; it’s just a low offer. I get it if people don’t like the low offer, but that doesn’t make the sender a liar.

If it’s really being seen as a ‘deceptive’ practice (which is a stretch, in my opinion… but again, it would depend on the wording of the offer), perhaps these letters ought to include some kind of disclaimer on them, such as,

DISCLOSURE: Each party represents itself. Buyer represents itself exclusively and Seller represents itself exclusively. Neither party has reviewed documents or negotiated in the best interests of the other party. Each party is advised and agrees to consult with licensed real estate professionals, like attorneys, Realtors, or appraisers, as necessary.

Note: This clause was copied straight from the PA template in our course.

If anything, it would let the seller know that they should get help if they don’t know what their property is worth and that the buyer isn’t working on their behalf, in their best interests.

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@retipsterseth yeah at net bottom I really think this is a political hot potato topic, more than a real legal problem for investors. All these memes going around about “China’s buying all the farmland!!!” - not to mention the history of farm country and farmers perceiving investors as bad guys since as far back as farms have been bought and sold.

But, great advice and a reminder that buying and selling real estate is a different business than dropshipping t-shirts on Etsy, subject to much stricter and voluminous legal requirements.

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