Fake leases/agreements - How to assess the risk?

[logon9]

This may be a silly question, but here goes:

I read in one of the threads about a case where the owner could come up with a fake 20-year lease/agreement (supposedly signed before the tax sale) with someone in his family. The caveat there was that you would end up being a landlord who cannot evict, gets practically nothing for the property, and has to take care of it.

My question is how to distinguish situations where this could be a real risk from those where this couldn't happen.

[Pfm1011]

I think you were reading my post on Dawson st in Niagara.

The chances of that happening are extremely extremely thin to non existant in all but extreme cases so I would not worry about it at all.

The building in question was a commercial plaza where the owner was a tenant of the mall.  There was also an Offshore Trust involved in the development and ownership of the mall so the gentleman was familiar with law and legal games.

It would be very easy to change a corporate lease from a triple net to a full gross or single net and would be impossible to prove.  The building was also worth north of 500K so it would not go without a fight.

The reality is that it is not a threat except in extreme cases and only on commercial properties with owner/tenants. In a residential property no one would believe the owner if he tried a scam like that and would have to produce cashed checks so its a non starter. You also have to appreciate that anyone who could think of that scam would have been smart enough to pay the taxes in the first place.

In a commercial however there is no "standard" lease and it is very common for different tenants in the same complex to have different leases depending on when they signed them so games can be played. You also have to appreciate that in commercial , there is no owner /tenant legally and are actually different corporations. Although the owner or corp lost the building, the tenant corp is an entirely different party legally. Not like a house where the owner and tenant are one in the same.

Again if the owner/tenant can afford to hire a lawyer to play the game, he probably would have just paid the taxes in the first place.

I believe in my post I stated, don't waste your time on that property as he would redeem anyways, which he did. Nobody lets a 500 k building, across from a future loblaws plaza, go for 100k in taxes.