Wednesday, July 20, 2016

California Man Cons Grandparents Into Signing Over Deed To Their Home Of 56 Years, Pockets Over $400K In Refinancing Proceeds, Then Sells Premises Out From Under Them

In Thousand Oaks, California, The Acorn reports:
  • Sitting on a hillside under towering pine and eucalyptus trees is the home Hank and Helen Kawecki have lived in for 56 years. But it might not be theirs for much longer.

    The Kaweckis, both in their late 80s, have received foreclosure notices on the 2,000-squarefoot, mid-century post-and-beam house they bought directly from the builder. In what they call the worst kind of fraud, they say their grandson took out three separate loans against the home and then tried to sell it out from under them.

    “I’m in a daze and we can’t sleep,” Hank said.“She’s nervous and can’t walk half the time and I’m getting like that.”

    The ranch-style house off Erbes Road in T.O. holds all the Kaweckis’ worldly possessions.

    And it holds memories of raising a family there and of the visits from their five grandchildren and five great-grandchildren. They did, however, willingly sign the deed over to their grandson, whose name they requested not be used due to ongoing criminal investigations and court proceedings. Attempts to reach him for comment on this story were unsuccessful.

    The trouble started two years ago, when the Kaweckis found themselves in need of money. They were thinking about getting a loan from the bank, but their grandson told them they wouldn’t be able to because they were retired. They said he suggested they sign the house over to him and he’d take out a loan against it and give them the money.

    “We signed the papers but we didn’t read them carefully enough,” Hank said. “We believed him and that was our mistake.”

    The grandson went on to convince the Kaweckis it would save them money if he kept the loan funds—about $470,000—in his account and just gave them monthly disbursements, they said. They agreed, but after a few payments, the money stopped coming.

    Things got worse. He put the home up for sale without telling them.

    Several times the grandson asked the Kaweckis to leave the house because he was having bank agents come by to assess the home to help him lower the loan payments, but in reality, he was having real estate agents and possible buyers over to view the home, they said.

    The Kaweckis remained unaware of the looming sale until a neighbor on their close-knit block found out by sheer chance.

    Art Kraft said he was talking with a Realtor about renting out his property when the agent mentioned that another house on the street was for sale—the Kaweckis’.

    “I had been there the day before and they didn’t mention selling their home, so I came up that day and said, ‘Hey, your house is for sale and it’s going to be foreclosed soon,’” Kraft said.

    The Kaweckis didn’t believe him. They asked their grandson about it and he convinced them it wasn’t on the market.

    It took another neighboring couple to open their eyes.

    Linda Emerson said she found out when two people came to her door saying, “We’re the new neighbors.”

    “We went over (to the Kaweckis) and said, ‘Your house has been sold,’ and they couldn’t believe it,” Emerson said.

    Emerson’s husband, Doug, did some online research and discovered evidence of the prior loans that finally convinced the heartbroken grandparents they’d been had by their own flesh and blood.

    With the help of their neighbors the Emersons, the Kaweckis were able to get a lawyer who helped stop the sale and begin a civil case against the grandson, but the couple still faced eviction.(1)

    “They have a lawsuit on file, and in that lawsuit they’re claiming the first deed was fraudulent . . . but lawsuits like that take a long time, they take a lot of money,” Doug Emerson said. “The problem is they could win their lawsuit, but it wouldn’t be until after they were evicted and they basically have no money, no place to go.”

    “The No. 1 type of reported abuse against our elders is financial,” said Marcy Snider, elder abuse program manager for Ventura County Adult Protective Services. “What we’re seeing mostly is, ‘Why don’t you quick deed the house to me?’” Snider said.

    In addition to home deeds, Snider’s department receives many cases of people giving full access of their bank accounts to others, perhaps to pay bills or manage the finances, without realizing the person can do whatever they want with the money in the account.

    “People do it because they think they’re doing the right thing,” Snider said. “Nobody expects family members to take advantage of you, but money can change people.”

    The county statistics—50 to 70 percent of the abuse comes from family members—match national figures, she said.

    In 2015, the department received more than 3,700 reports of abuse and neglect of the elderly and dependent adults. May and June this year each saw more referrals than any other month in the department’s history.

    The financial abuse isn’t always obvious—especially when it comes at the hands of family.

    For Hank and Helen, it’s catastrophic.

    “We’re going down,” he said. “The money we had in the bank for emergencies is almost gone.”

    The Ventura County Sheriff’s Office says the grandson is being investigated and that the case is ongoing.
Source: Grandson’s betrayal threatens couple’s home.
(1) To rescind this type of fraudulent real estate transaction, the main issue to be addressed under California law is the determination as to whether the transfer of title (ie. grant deed), and any subsequent deeds of trust / mortgages placed on the property, are absolutely void, or merely voidable, and how the equitable doctrine of bona fide purchaser (ie. one who acquires his or her interest in real property without notice of another's asserted rights in the property and therefore takes the property free of such unknown rights) interacts therewith.

Among the California court rulings that have addressed this issue is Schiavon v. Arnaudo Bros., 84 Cal. App. 4th 374; Cal.Rptr.2d 801 (Cal. App 6th Dist. 2000):
  • A deed is void if the grantor's signature is forged or if the grantor is unaware of the nature of what he or she is signing. (Erickson v. Bohne, supra, "130 Cal.App.2d at pp. 555-556.)

    A voidable deed, on the other hand, is one where the grantor is aware of what he or she is executing, but has been induced to do so through fraudulent misrepresentations. (Fallon v. Triangle Management Services, Inc. (1985) 169 Cal.App.3d 1103, 1106 [215 Cal.Rptr. 748].) The same rules apply to the reconveyance of the property interest under a deed of trust as to the conveyance of property by grant deed. (Wutzke v. Bill Reid Painting Service, Inc. (1984) 151 Cal.App.3d 36, 43 [198 Cal.Rptr. 418] (Wutzke).).
A void deed is a nullity, invalid ab initio, or from the beginning, for any purpose. It does not, and cannot, convey title, even if recorded. The interest of a good faith purchaser under a void deed is not protected. In other words, the interests of a subsequent purchaser or encumbrancer are also void, and any action in court to declare them void can be brought at any time.

In contrast, a voidable deed conveys property and creates legal title unless, and until, it is set aside by the court. The interest of a good faith purchaser who asserts ownership under a voidable deed will be protected.

The distinction between void and voidable deeds becomes highly important in its consequences to third persons (ie. subsequent purchasers and encumbrancers), because nothing can be founded upon a deed that is absolutely void, whereas from those which are only voidable, fair titles may flow.

Furthermore, in California, even in a case of a subsequent purchaser or encumbrancer who buys under a deed deemed to be voidable, said purchaser / encumbrancer will not be afforded the protection available to a bona fide purchaser if it can be shown that said purchaser knew or should have known of any unrecorded legal or equitable interests.

In the case of real property in the open possession and occupation by one other than the holder of the recorded title at the time of the title transfer, a subsequent purchaser or encumbrancer will generally be presumed to have purchased and taken a conveyance from the seller with full notice of all the unrecorded legal and equitable rights in the premises of such party in possession and in subordination to these rights. "As a general rule, possession of real property is constructive notice to any intending purchaser or encumbrancer of said property." JR Garrett Co. v. States, 3 Cal. 2d 379 (Cal. 1935). This presumption is only to be overcome or rebutted by clear and explicit proof on the part of such purchaser, or those claiming under him, of diligent, unavailing effort to discover or obtain actual notice of any legal or equitable rights in behalf of the party in possession.

Whether the subsequent purchaser / encumbrancer knew of the occupant's possession, or not, is immaterial. It is his duty to know who was in possession of the property before making the purchase, and his purchase without ascertaining the fact must be regarded as the strongest evidence of bad faith on his part. The burden of making the proper inquiry is cast upon him by the mere fact of actual possession on the part of the occupant in possession. See Scheerer v. Cuddy, 85 Cal. 270, 24 P. 713 (Cal. 1890).

If it were allowed that by failing to acquaint himself with the fact of possession on the part of another than the seller, the subsequent purchaser / encumbrancer could avoid the effect of the rule to make diligent inquiry of those in possession as to any unrecorded rights or equities they may have in the realty, he could purposely avoid any inquiry on the subject, and thereby evade the rule and its consequences entirely. Ibid.

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