Fraud Case Ends With Probation for Rogue Foreclosure Landlord Mark Guerette

Categories: Economy
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The Fergusons, happy former tenants of Guerette's.
The State Attorney's Office has wrapped up its case against Mark Guerette, the guy written about in the New York Times and here on the Juice for his work leasing empty, foreclosed homes to families in need by way of an antiquated squatter's-rights law.

Guerette found around 100 foreclosed homes that had been neglected in Broward County, particularly North Lauderdale, and informed the banks that he intended to move in and start renting them out. He used "adverse possession," an old clause in the Florida Statutes that grants someone ownership of a neglected property if he takes care of it for seven years.

After multiple meetings with detectives and Broward prosecutors in which Guerette and his lawyer say they cooperated fully, he pleaded "no contest" to charges of organized fraud in the second degree. He was then adjudicated guilty without a trial and given two years' probation. Guerette says he wanted to avoid a trial because he needs to deal with his own foreclosure and take care of his two children.

Alesh Guttman and Don Tenbrook were the assistant state attorneys on the case. Guerette says that during their first meeting, without his lawyer present, the prosecutors told him there was "nothing legally they could do to stop [him]." A couple of months later, an investigator for the state attorney, Joseph Roubicek, started knocking on doors.

"We told him to go out and find as many tenants as possible," says Guttman.

Of the 20 or so people who had rented properties from Guerette (under the name of his organization, Saving Florida Homes), six came forward to give sworn statements to Roubicek. They said that Guerette charged them rent ranging from $800 to $1,250 per month. Four of the six tenants told Roubicek they had no idea what "adverse possession" was, even though they signed a page-long addendum at the back of the lease invoking (but not defining) it. Note: See a copy of the addendum below.

Roubicek's report states that one tenant "questioned [the addendum's] meaning and Mark Guerette stated that the house 'was in foreclosure and that they had ownership of it. If anyone should stop by to let them know and they will take care of it.'" 

From the addendum itself:

Tenant(s) understand that the property is or may become the subject of an eviction or an ejectment action under applicable Florida Law, and that if that should such occur, the Tenant(s) shall notify Landlord... Should the Tenant(s) be presented with any cash for keys... these monies shall forever release and discharge the Landlord and its Agent(s) from any and all liability whatsoever to the Tenant(s)...

As part of his plea deal, Guerette agreed not to file any more claims of adverse possession for two years. The prosecutors say he used the mechanism in bad faith, essentially charging people rent on properties he didn't yet own. But Guerette's lawyer, Robert Shearin, says that's missing the point. 

"What does adverse mean?" asks Shearin. "It means antagonistic. You're taking over someone's property! All adverse possessions are in bad faith."

When Guerette was seeking legal advice on the idea in June 2009, he emailed Mark Fisher, an attorney. Fisher replied:

The requirements for adverse possession are very strict. The person claiming adverse possession must possess the land openly, notoriously, and in a visible manner such that it is in conflict with the owner's right to the property.

But that doesn't say anything about charging rent -- the crux of what got the state's knickers in a twist and why it pursued Guerette so doggedly. The six witnesses are named as "victims" in the indictment. But Guerette and his lawyer say that most of the money went to the expenses of finding homes and making them suitable to inhabit.

Some of the named witnesses are still living in the houses Guerette rented them, although he says he stopped collecting rent once it appeared that what he was doing might be illegal.

According to Guttman, the prosecutor, "We saw that this could be a real problem, with all the houses being foreclosed. It could make the real estate crisis even worse than it is."

But Guerette was filling empty, bank-owned properties that were falling into disrepair with warm taxpaying bodies. He's quick to point to the statistics: around 4,000 homeless people in Broward County, and 15,000 foreclosures last year alone. His solution may seem obvious, but the state, in particular Judge Matthew Destry, has decided that it's illegal.


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