City Council Approves Land Fraud Safeguards

Citing the Marshall Redman case, the Los Angeles City Council Tuesday moved to crack down on land fraud and give new protection to landowners from property swindles.

The council approved a package of three measures, including one designed to cut into a backlog of 500 cases of illegal subdivision now pending.

Councilman Hal Bernson, who wrote the legislation, said he was responding to a series in The Times about Redman, who was charged in May with theft and fraud in a $20-million Antelope Valley real estate scheme.

“These will make sure we are not put in the same position,” Bernson said of the legislation.

Between 1978 and 1994, Redman’s three companies allegedly sold illegally subdivided land in Antelope Valley to thousands of working class Latinos, many of them from the city of Los Angeles. At the time Redman was criminally charged, dozens of his purported victims lived on tracts in the desert without water, power or sewer service.

Although the Redman charges involved the subdivision and sale of land in unincorporated areas of Los Angeles, Kern and San Bernardino counties, Bernson said he was concerned that many of the victims of the alleged fraud have been Los Angeles residents.

Bernson said he proposed the measures to reduce the chances of similar schemes happening in the city.

City officials said they uncover about 200 cases of illegal land subdivision each year. But they said they rarely find that fraud is involved.

“We don’t expect to find fraud but we want to keep an eye out for it,” said Frank Eberhard, the city’s deputy director of planning.

The council passed these ordinances Tuesday:

* A requirement that title insurance cover land fraud and illegal subdivision violations.

Bernson’s office had no estimate on how much the added insurance would cost.

* A directive to the Planning Department to immediately notify property owners of potential violations on their property.

Illegal subdivision violations are currently not a top priority, planning officials acknowledge, so notices of violations are often not sent immediately, city officials said. Part of the delay is also due to staff shortages.

* The third measure authorizes the city to spend $72,000 to hire a planning associate to exclusively process a backlog of about 500 illegal subdivision violations.

The most common violations occur when a landowner splits a large residential lot and sells off the back half for development, city officials said.

But unless the landowner submits proper documentation and meets city requirements for lot size, road access and utilities, the division is illegal. The buyer of the new lot subdivision may not be able to build on the property.

Until the property owner meets with city officials to correct the problem, the city will not issue building permits for the property.

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If a landowner attempts to sell the illegally subdivided land, city officials can pursue criminal charges, Eberhard said.

In the wake of the Redman scandal, the county Board of Supervisors created special committees to investigate better early warning systems for land fraud, and to help out the families that still live on high desert land.

Two years ago, prosecutors from the city and Kern County put Redman out of business when he agreed to settle a lawsuit alleging he had illegally sold high desert land. In May, county prosecutors filed criminal charges against Redman in connection with the alleged scheme.

The Times reported that half a dozen local and state agencies had received complaints about Redman’s operations since 1980, but had failed to take effective action to protect buyers.