Two Tucson real estate companies have agreed to pay restitution and fines totaling $375,000 to settle state consumer-fraud charges involving rent-to-own deals.
Deed and Note Traders, 881Home and their manager, David Kinas, have signed a consent judgment to settle a 2021 lawsuit alleging the companies defrauded consumers, mainly by failing to disclose underlying mortgages on properties they sold to consumers in rent-to-own arrangements with so-called βseller carryback financing,β Attorney General Kris Mayes announced Thursday.
The lawsuit alleged the defendantsβ misrepresentations trapped consumers in mortgages they had never bargained, and Kinas and his companies did not always pay those underlying mortgages, resulting in foreclosures in some cases.
Deed and Note Traders and Kinas were previously cited by the attorney general in 2006 for similar activity, and as of 2021 still owed the state $300,000 from a settlement in that case.
The recent settlement requires the defendants pay $350,000 in consumer restitution and $25,000 in civil penalties. Kinas and his real estate companies are also permanently prohibited from selling properties with seller carryback financing.
Deed and Note Traders and 881Home, which filed for bankruptcy in 2007 and again in 2010, will be liable for $350,000 in additional civil penalties if they fail to pay the agreed-upon restitution and penalties by January 2033, according to the consent judgment.
If they do sell any properties, they must use a licensed real estate agent and an independent escrow agent and provide title insurance as part of the sale, according to the consent judgment.
Consumers who are considering purchasing real estate, particularly through a rent-to-own or other installment-sale arrangements, should beware of undisclosed seller carryback or wraparound financing, the attorney general said.
If you believe you have been the victim of fraud, you can file a consumer complaint by visiting the Attorney Generalβs website, azag.gov, or by calling 520-628-6648 in Tucson, or outside the Phoenix and Tucson metro areas by calling 800-352-8431.
Twingate used data from the FBIβs Internet Crime Report to find the most damaging cybercrimes in each state, including crime type and average damages reported.
