It is the office of Council Speaker Adrienne Adams that will be announcing initiatives in her State of the City speech to safeguard homeowners against fraudulent real estate speculation.
The upcoming proposed law would aim to safeguard assets through a new aid program and educate homeowners and those who inherit property about the true market worth of their dwellings. The specifics of the endeavor are still being worked out.
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The proposed actions are a reaction to an investigative series by THE CITY newspaper that showed how speculators target traditionally Black and Latino properties in New York that are gentrifying. These properties are usually held by people who passed away without leaving a will.
Speculators discover property that rightfully belongs to a dispersed group of distant heirs, some of whom may not even be aware of the value of the fractional shares they have inherited. To compel a forced sale of the house and maybe drive out surviving family members, speculators may lowball heirs for their shares. This is authorized by state law. Alternatively, investors may try to buy the entire property by purchasing several fractional shares, which would enable them to vacate long-term renters and sell the property for a price much higher than what they originally paid.
Such tactics have led to the exodus of New Yorkers of color from the city and have the potential to siphon off significant generational income from Black and Latino households.
Speaker Adams has proposed legislation that would force real estate speculators to tell property owners of their home’s fair market worth to shield gullible heirs from taking low-ball bids.
According to THE CITY’s research, real estate speculators frequently make offers to acquire the property shares of distant descendants; however, the heirs may not necessarily be aware that the bids may be made for substantially less than the shares’ market worth. A few of the heirs who consented to sell their holdings told THE CITY they felt deceived to find out the speculators had resold the houses for several times what they had paid, saying they were unaware they were being taken advantage of.
The Council has not yet provided specifics on how this disclosure would operate, such as when and how the fair market value would be ascertained along the process.
Certain disclosures are already given to property owners, but they may not be accurate. The state form that is included with the deed transfer documentation shows the “total assessed value,” which is used to compute property taxes. However, such an amount is usually far less than the asking price.
A different measure would mandate that the city’s Department of Consumer and Worker Protection create a program to assist residents of New York in safeguarding their assets and managing inherited property. Through assistance with tenant agreements, property taxes, and other procedures, this service would help individuals who inherit property decide whether to sell.
Along with the law, the Council intends to hold district-based events where senior citizens may get free legal assistance with will preparation and other real estate planning-related tasks. These events, which are explicitly targeted at communities that speculators target—typically gentrifying regions with predominantly Black and Latino populations—will be hosted in collaboration with community organizations and local law schools.
“We want to plan for the successful wealth of our lineage,” said Tuulikki Robertson, director of operations of The Black Institute, which has been working with the Council to organize these upcoming activities. “There are predators out there and it’s important to get your will done.”
