A trend in marketing homes for sale – temporary residents to give a home a “lived in” feel – is raising legal questions.

“Faux homeowners,” as they are called in a recent Wall Street Journal article, are presented by marketers as a natural extension of “staging” – traditionally referring to decorating a new home or neutrally redecorating a previously owned home to appeal to a broader base of buyers.  The Journal piece quotes Steve Rogers, president of Windermere Exclusive Properties in San Diego, saying these human props provide “that little extra mint on the pillow.”

The legal question – faux or fraud – is in how these transitional residents of these homes are portrayed to prospective buyers.

If there is disclosure, i.e., it is clear to the prospect that the person or persons living in the home are employed as props – or even as caretakers or managers – of the property and are living there at a reduced or no rental cost there is no fraud.  However we could see this tactic backfiring.  After all, if a home shopper is seeking new construction, they may not appreciate purchasing an already lived-in home, particularly when the residents, because they have no investment in the property, would not necessarily care for it as a homeowner would.

Without such disclosure we would suggest a purchase transaction could be considered fraudulent.  Furthermore, if a prospective buyer is actively led to believe that the person or persons living in the home are the homeowners by the owner’s agent, clear intent of fraud can be provable.

With any home purchase, we would suggest that a prospective buyer ask to talk with the homeowner(s) and those living in neighboring homes for their opinions and experiences with the community – schools, shopping, traffic, noise, etc.  While an agent may be able to provide scripted answers to such questions, true insights would come from those who actually have lived there.  If a homeowner is consistently unavailable for such a conversation about an obviously lived-in property, it should raise suspicion, particularly if the property has been on the market for an extended time.  Logically, a homeowner would be eager to comply in order to sell.

If you believe you are being or have been defrauded in a real estate purchase – either by a faux homeowner tactic or other scheme – contact a law firm experienced in consumer fraud and real estate transactions to learn if you have a cause of action.