united-states rental-property real-estate fraud texas
What is the name of the type of real estate fraud/scheme I&#39;m describing?
<p>I'm writing a mystery story right now that takes place in Texas and currently the motive is that the victim - a real estate agent - typically leases property to people (particularly people starting a small business) at almost dirt cheap prices but then eventually come to increase the rent to insane prices it forces them away, the victim taking the land for themselves (and to ensure this would happen, they would use their connections to make sure the business would fail, yada yada yada).</p>
<p>I'm fairly sure this is some sort of real estate fraud, but what type of real estate fraud would describe this? Is this even a fraudulent practice in the first place?</p>

<p>It is not fraud to have a rent that will increase after a period of time, indeed it is a common and legitimate practice. It would be unethical, and possibly fraudulent, if an agent or broker convinced the would-be tenant to take on a property beyond the tenant's means after the rent increase took effect. That is not common enough to have a special name as far as I know, it would simply be a form of deceptive marketing, or perhaps predatory lending.</p>
<p>If the increase were somehow hidden that would be fraudulent, but it is hard to see how it could work, as any increase would need to be spelled out or at least authorized in the lease to be legally binding. The only way I can see such a scheme working is if the broker found a somewhat naive victim who simply did not read or did not understand the previsions for the later increase.</p>
<p>I recall a somewhat similar scheme in a work of fiction, <em>The Mandeville Talent</em> By George Higgins (author of <em>The Friends of Eddie Coyle</em>). In that book the schemer loaned the victim 50% of the purchase price of a property that the victim intended to convert to a resort on a 10-year mortgage, calculating that the resort would not earn enough to make the large balloon payment, and the schemer would wind up owning the entire property for half-price, plus expensive improvements made by the victim. When the resort did well enough that it was clear the victim would be able to make the balloon payment, the schemer (who was associated with organized crime) had the victim killed so that it could be acquired cheaply from the victim's estate. That could also be called predatory lending, I suppose. A well-written book, IMO.</p>

<p>I can see two angles to this for a fictional villain-later-victim:</p>
<ul>
<li><p>The agent isn't just brokering real estate, the tenants are getting into a franchise agreement with an unsustainable business case. The franchisees are required tu buy overpriced junk from the franchise <em>and</em> pay fees on top of that for the use of the trademarks. This might be legal.</p>
</li>
<li><p>The real estate agent, the bank, and possibly others are accomplices. The idea is to have the buyers sink their life savings into a business, have the business fail, and then have the bank foreclose. Through various hidden fees and transactions, in the end the schemers have the real estate back, <em>plus</em> all the money their victims had. This might be illegal but hard to prove.<br />
(What I had in mind here goes beyond predatory lending, with the agent providing overpriced contractors, etc., to extract more money.)</p>
</li>
</ul>
