Couple Moves Into Dream Home—Look Behind New Drywall Reveals They've Been Scammed By Sellers

Aug 23, 2021 by apost team

For many people, purchasing a new home represents one of the most significant financial investments that they will ever make. Not only do houses cost a lot in most cases, they also represent binding yourself to a certain area much more closely than renting an apartment. Buying a house also includes a lot more than simply renting a home somewhere - there are many things new house owners have never dealt with before, such as upkeep or zoning laws. In this story from 2017, a couple in Minneapolis found that the purchase of their dream home quickly turned into a nightmare due to an unscrupulous house flipper.

John Kozlik and his partner had purchased a home in the Lake Nokomis area, but after rain damage occurred in the basement, the full extent of the house's shoddy workmanship and deception to cover it up came to light.

According to CBS Minnesota, when John Kozlik decided to purchase a new home with his partner, they were initially very impressed with a home they viewed in the vicinity of Lake Nokomis.

The roomy home featured four bedrooms and three bathrooms and checked off nearly everything on their wish list for their perfect house. Their family had space to grow, the layout was just what they wanted and the location was nice as well. When they inspected the property, everything seemed to be in order and just waiting for them to move in. They were so excited that they exceeded the $360,000 asking price by $10,000 to make sure they were not outbid for the home.

Their excitement quickly turned to disappointment when they discovered that many of the modern finishes that they loved so much were just a thin veneer hiding shoddy workmanship.

The first sign of a problem came when a rainstorm led to water pouring into the home's basement through a poorly sealed window. This resulted in water damage to the cellar walls. When some of the drywall had to be removed to repair the damage, that is when John and his partner realized that they had been deceived.

Behind the walls, they found cracked cinderblocks, growing tree roots, and most importantly: black mold. Black mold is an especially harmful form of mold that can cause health problems when people are exposed to it.

When John tried to reach out to the people he had purchased the home from, he found out that the couple he believed had lived in the home and done the upgrades themselves were actually part of a company named "Ace of Spaces" that was created to handle the sale of the home and dissolved a few days after the sale was completed. John also found out that none of the work done on the home had been properly permitted.

One of the key members of Ace of Spaces was a man named Joe Werb who, according to a 2017 story, is in jail for his role in another scam involving cell phone sales. As of 2017, John and his partner were in the arbitration process to try to salvage some of the money they have invested in the home. 

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Speaking about the experience, John recalled, "It seemed like the perfect house." CBS Minnesota reported that the home was located on 13th Avenue South near Lake Nokomis and fit the wish list of John and his partner and had four bedrooms, three baths, a fenced yard to help foster dogs and was ready to move in with new finishes throughout.

With such incredible details, John remembered thinking, "Yeah this is definitely the house we want to make an offer on." However, as the worth of the home plummeted and John found himself in a bad position, he said, "It’s the worst thing you can imagine happening when you buy a house. That’s what it is." 

The problem was also that once John was in this situation, he could no longer resell the house, as it was damaged and he would lose a large chunk of money, and foreclosing the home would hurt his credit for years to come. Since John had very little choice but to pursue arbitration, which is a legal proceeding where a professional in the industry reviews the case to see if fraud occurred.

However, "We don’t know how long it will take," John said about how long the process may last. However, he knows that if the opportunity to afford another house comes to him, he would do things drastically differently. 

Nicholas Montgomery, who owns Advice Homes Real Estate, advised, "To protect your interest, your realtor should always try to do their best to ask for what’s going on to protect you."

Send this story of a homebuyer victimized by fraud to warn someone you love to be cautious when making large purchases. What did you think of this story? What is a good way to avoid this issue? Tell us below. Pass this article on to your friends and family members.