Companies made low-ball offers to purchase land
DES MOINES – Three out-of-state companies that solicited rural Iowa landowners with land purchases far below market value through the mail have agreed to stop doing business in Iowa, Attorney General Tom Miller announced.
In late 2021 and early 2022, the Attorney General’s Office received several complaints that unsolicited land purchase agreements were sent via mail by CRT Acres, Land Acquisitions and Westward Land Holdings. The solicitations included a purported “Purchase Agreement” that, in part, describes the property owned by the recipient of the mailer and offers to purchase it. The amount offered to buy the property appears to always be a small fraction of its fair market value. The recipient is invited to sign the offer and send it back to the solicitor to accept it.
The Iowa AG alleged the companies were in violation of the Consumer Fraud Act as their business model constitutes “unfair conduct,” according to assurances of voluntary compliance between the AG’s Office and CRT Acres, its owner Christopher Michael Neal; Land Acquisitions, its owner Brandon Waterson; and Westward Land Holdings, its owner Jon Burnett.
Neal, Waterson and Burnett, and their companies, denied they misled landowners or violated the law, but have agreed to permanently cease solicitations to purchase agricultural land located within the state of Iowa.
“Our agreements ensure these companies will not be taking rural Iowans' family farms from them for pennies on the dollar," Miller said. "Additionally, this action sends a clear message to others who target older Iowans with deception and fraud: Your type of business practices are not welcome here."
At this time, the Iowa AG is unaware of any Iowans who completed a land transaction using these mail solicitations from the companies. If, in the future, the companies receive an executed solicitation via the mail, the transaction will not be completed, per the agreement with the AG’s office.
An Offer in the Mail
Under the companies’ business models, Iowans were identified as owning desired land through county assessor information. The companies then sent these landowners – often rural, older Iowans – a purported “purchase agreement” through the mail that offered to buy the land at rates far below fair market value. The landowners were then invited to execute the purchase agreement and send it back via mail.
In a complaint submitted to the AG’s office, Dave Hilgemann of Clayton County, included an offer he received to purchase 16.38 acres of his land for more than 10 times less than the actual market value. Similarly, a complaint submitted to the AG’s office by a Guthrie County landowner concerned a proposal from CRT Acres offering $7,616.31 for 51.39 acres of land.
“We found it to be obviously a scam of some sort due to the amount of the offer presented,” the landowner said. “Our concern is that some people may fall victim to this dishonest person.”
Miller shares that concern. His office alleges that the companies’ processes resulted in there being no assurance that the landowner has legal capacity to execute the real estate contract or that it is even the landowner entering into the sale.
According to the agreement, this business practice provides “no benefit to the consumer while putting Iowa farm owners at risk of substantial and unavoidable harm including but not limited to the sale of farmland at unconscionable prices, potential lawsuits related to the sale of land, and sales of land without owners’ knowledge.”
Iowa's farmland averaged $9,400 an acre this year, a 21% increase from 2021, according to the USDA Land Values report issued this month.
“Rising prices attract speculators and scammers,” Miller warned.
The AG’s office reminds Iowans to be wary of land grab proposals that provide low-ball offers to buy farmland in rural Iowa. Landowners should not only protect themselves, but also their neighbors and loved ones, from such offers.
Kelvin Leibold, farm and agriculture business management specialist with Iowa State University Extension and Outreach, suggests that before landowners consider selling or gifting property they should:
- get it appraised.
- discuss it with your tax planner.
- discuss it with your attorney.
- never do anything under pressure or under a “time deadline.” If the offer is a good one the offer will still be there in a few months. Even if it is a missed opportunity, you still have your land!
If you have a similar report please contact the Iowa Attorney General’s Consumer Protection Division at firstname.lastname@example.org or 515-281-5926 (in Des Moines area) or 888-777-4590 (outside the metro area).