NAR Associate Counsel Jessica Edgerton discusses how to identify and prevent elder abuse, an emerging risk management topic.
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Window to the Law: Prevent Elder Abuse: Transcript
Welcome to Window to the Law. I’m Jessica Edgerton, Associate Counsel with the National Association of REALTORS®.
In any five year timeframe, an estimated forty percent of seniors may be subjected to some form of financial abuse, at a staggering combined loss of approximately thirty-six billion dollars.
Financial schemes against elders sometimes involve real estate transactions. In this Window to the Law, I will be giving you a brief overview of how real estate professionals can spot senior financial abuse, and what to do if you see it.
So - let’s start by defining “senior financial abuse.”
While the definition varies from state to state, as a general proposition, senior financial abuse occurs when:
- A person in a position of trust;
- Takes financial advantage of an elderly person - generally defined as somebody over 65 years of age -
- Through threats, coercion, or other unethical tactics;
- For their own personal gain.
In the context of real estate, financial elder abuse schemes can take many forms, including reverse mortgage scams, property investment schemes, and foreclosure rescue schemes. They can also occur when a trusted individual – for example a family member, or even a real estate professional, coerces an elderly homeowner to sell her home, often well under value. The perpetrator gains financially in some way – by taking control of the money from the sale, for example, or, in the case of an unscrupulous real estate professional, by reaping a quick commission – and the elderly person is left financially devastated, and without a home.
So how do we spot senior financial abuse?
Elder abuse can come in many forms – physical, psychological, and financial. Warning signs that a senior is being abused in any of these ways can include:
- Frequent arguments or tension between a caregiver and an elderly person;
- The elder becoming withdrawn or depressed;
- Suspicious changes in the elder’s financial condition;
- Frequently unpaid bills; or
- Signs of a lack of medical or physical care.
A real estate transaction that involves senior financial abuse is a bad real estate transaction. Beyond the obvious ethical and reputational issues, a real estate professional’s involvement in a transaction involving senior abuse can lead to civil lawsuits and even criminal prosecution.
As a real estate professional, there are a number of steps you can take to protect seniors, while simultaneously reducing your legal risks of becoming involved in a transaction tainted by elder abuse:
- First – take extra care to ensure that your senior client understands and consents to every stage of the transaction. You can do this by following up important oral communications with a written recap. This can help your client stay fully apprised of the transaction, and may also be beneficial to you down the road if legal questions arise.
- If you suspect that a senior is being abused – financially, physically, or emotionally – report it. You can do this by calling your local Adult Protective Services, and - if you feel that elder may be in immediate danger – by calling 911. The Administration on Aging has a comprehensive resource on how to report elder abuse, which can be accessed at this link: http://www.aoa.acl.gov/AoA_Programs/Elder_Rights/EA_Prevention/WhatToDo.aspx]
- If you suspect that an elder involved in your real estate transaction is being abused – in addition to reporting the abuse, hit pause on the transaction and consult with your attorney to determine the appropriate next steps.
- If an elderly home owner’s family member or other caregiver asserts control over a real estate transaction by claiming to hold a power of attorney, insist on receiving a copy of that power of attorney, and provide it to your lawyer to verify that it is both legitimate and applicable to the real estate transaction at hand.
- Finally, education is a key resource in the fight against elder abuse. Licensees who regularly work with seniors may benefit from taking continuing education courses specific to serving the elderly.
The effects of elder abuse are far-reaching and devastating. As a real estate professional, you can help protect elders from financial predators, and, in the process, ensure that your business remains on the right side of the law.
On Friday, November 4th at the Annual REALTORS® Conference and Expo in Orlando, FL, from 12:30 to 2:30 PM, the Risk Management & License Law Forum will be presenting a program on best practices and legal risk management when serving the elder community. Attendees will gain in-depth knowledge on protecting their business transactions and their elder clients from financial fraud and other forms of elder abuse. We hope to see you there.
As always, thank you for watching Window to the Law.