Making a fortune off bad deeds

Using title defects, man stakes claim to Va. Beach oceanfront

July 05, 1999|By Robert Guy Matthews | Robert Guy Matthews,SUN NATIONAL STAFF

VIRGINIA BEACH -- The spring night Ed Lindsley, a wily old land speculator, collapsed atop a pile of land deeds and slipped into a diabetic coma, some people in this resort town wondered if at last they were secure.

For decades, Lindsley built his fortune using long-forgotten land deeds to force homeowners, developers and business people here to pay him for land they thought they owned. Now, he lay hurting over the very same deeds that he might one day use against some unwitting landowner.

But within weeks, Lindsley was out of the hospital and working full throttle on his boldest, grandest plan yet: claiming ownership of a few parcels of the Virginia Beach oceanfront, the soul of the state's largest city and most popular tourist destination.

And it looks as if he has a case.

Virginia Beach has been mired in a frustrating battle to prove that it owns the beachfront that it built a boardwalk over, added sand to, kept clean and promoted as a sunny respite for vacationing families for decades.

Lindsley has forced Virginia Beach officials to admit that they hold no title to the beachfront parcels. A state and federal court have refused to throw out Lindsley's claim, leaving the city to await a judge's determination.

Lindsley doesn't really want the land. He wants two things: Nearly $4 million in damages and bragging rights that he could pull off such a bold move.

"He just likes to out-snooker everyone," says John Johnson, who got out-snookered by Lindsley when Johnson was forced to pay $3,500 for a part of his back yard. "This is gamesmanship to him."

To Lindsley, it's nothing personal. Just business. "The city makes itself out to be some saint and we as thieves," he says in his characteristic soft voice. "I love the beach. All I want is to be justified for what I own."

Many have learned the hard way that Lindsley plays to win.

His method is simple. Sniffing out a possible bad title transfer, he buys the assets, such as land, from the heirs of long-defunct and long-forgotten companies. He then alerts the current property owners that their deeds to the land that they believed they owned are not legally binding, because he now holds an earlier title to the land from the defunct company.

He will track down heirs all over the country who unwittingly own a piece of property and pay them for their divided share. Then he will force the current landowner, who thinks he owns the property outright, to buy Lindsley off.

To find these technical glitches, he spends months, sometimes years, searching old land records. The work is tedious and holds no promise of profit.

To be sure, Lindsley has not found a new way to torture landowners. Decades ago, enterprising businessmen built their fortunes from bad land-title transfers. But Lindsley takes advantage of the fact that title insurance isn't required in Virginia. So new landowners might not be aware of mistakes made long ago in the chain of ownership.

Profiting by mistakes

"I wanted to be a lawyer," says Lindsley, who dropped out of law school. "Then I decided I could make a better living off of lawyers' mistakes."

Indeed he has. Consider a few examples:

In 1975, Lindsley bought the rights from a defunct developer to a never-built street that was to run through the front yard of Dave Harris' two-story home. Harris, a salesman who had never met Lindsley, awoke one morning to find a for-sale sign posted on his property. He wound up paying $10,000 to become legal owner of his front yard.

In 1986, Lindsley forced the city to pay him $400,000 to end a dispute over ownership of another tourist haven, Ocean Park beach. Again, he bought the assets of defunct companies that developed the area around the turn of the century.

In 1991, Lindsley found out that upon the death of Henry Smith, a poor, uneducated lifetime resident of Virginia Beach, title to his house and land had not been properly transferred. Though Henry Smith's son John reared his family in the small house without indoor plumbing and had lived there for decades, Lindsley spent a year tracking down Henry Smith's other eight surviving children. They didn't know it, but they and John owned equal shares of their father's land. Lindsley paid them each $100 for their shares. By this time, John Smith was old and suffering from Alzheimer's disease. He too signed over his rights to the land for $100. Lindsley was declared sole owner of the property and house, assessed by the city at $32,000. The Smiths had to pay Lindsley to get the property back.

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