Real Estate and the Consumer Fraud Act
The Supreme Court of New jersey has recently spoken on the Consumer Fraud Act (CFA) regarding a transaction in the sale of real estate. In Tahir Zaman v. Barbara Felton (Decided September 9, 2014), the plaintiff contended that she was the victim of a fraudulent mortgage scheme when she entered into a contract without realizing that the transaction to which she agreed constituted the sale of her property.
The plaintiff brought a CFA claim alleging that the defendant engaged in an unconscionable practice. To prevail on a CFA claim, a plaintiff must prove three things: 1) unlawful conduct by defendant; 2) an ascertainable loss by plaintiff; and 3) a causal relationship between the unlawful conduct and the ascertainable loss. Although the CFA is usually applied in a broad fashion, New Jersey has adopted a stricter standard when it comes to real estate. If an individual is a “non-professional” in real estate, or does not advertise services to the public and purchases property for personal use or as an investment, the CFA does not apply.
Since the defendant in this case was not a professional in the real estate field, plaintiff’s claim under the CFA was dismissed.