Monday, September 30, 2019
Philadelphia has become a hot-spot for "flipping," or selling properties that people have owned for less than two years, second only to Detroit in profitability. Speculators Bryheim Murray and Kyle Easley have jumped on the bandwagon with a seemingly ingenious caveat: they contact heirs (through Ancestry.com leads) that are in line to inherit property that they are not aware of, explain they may have an exuberant tax bill if they actually get the property, and present them with an offer. The heirs are usually excited at the prospect of getting money that they were not expecting and jump to sell, usually completely unware of the property's true value.
Then enters the lawyer: Kevin Murphy, the most active seller of property in Philadelphia as an estate administrator. Murray and Easly, as buyers of the heir's property, have the heir assign Murphy as the newly established estate's administrator. Murphy then facilitates the sell, making sure all the taxes are paid and documents properly filed. His fee can range from $750 to over $9,000, court documents show, and the title company he uses is his own, housed in the same building as his law firm.
Murphy claims that because he comes into the picture after the sale has been initiated, he is just a facilitator and that "I'm not representing anybody." David Horton, a professor of law and an expert on estates, wills, and trusts at the University of California Davis, said the deals may violate the “duty of care” that estate lawyers must uphold to the estate's heirs. The duty, long codified in judicial decisions, holds that lawyers entrusted with assets must care for them as if they were their own. He and another law professor, Reid Weisbord, an expert on estates at Rutgers University Law School, questioned Murphy’s belief that he had no responsibility to vet sale prices because he was hired after the deals were struck. They also said that the deals themselves were improper from the start because the heir were not declared official through probate.
See Jacob Adelman and Craig R. McCoy, In Gentrifying Philly, Speculators Pay Heirs Peanuts — Then Flip Their Properties for Massive Gains, Philadelphia Inquirer, September 27, 2019.