Agent Essentials

Real Estate Agent Blog

The Land of Lies: Georgia’s Yazoo Land Scandal
September 15, 2021

The Land of Lies: Georgia’s Yazoo Land Scandal

by The CE Shop Team

Georgia’s Yazoo Land Scandal Made History

The Yazoo Land Scandal was one of the most impactful events in Georgia’s history. After the American Revolutionary War ended in 1783, the state of Georgia had a swath of land claims that had to be settled. At this time, the Peach State was led by Governor George Mathews, who, along with other Georgia politicians, accepted bribes to sell tens of millions of acres for next to nothing. 

Welcome to the Yazoo Land Scandal.

Post-War Georgia

After the war, Georgia was too weak and too poor to defend its western land claims, known as the “Yazoo Lands,” which bordered along the lower Yazoo River that creates the present-day separation of Louisiana and Mississippi. Because of this, the Georgia Legislature was eager to hear proposals from land speculators who planned to establish settlements there.
To secure the sale, companies interested in these lands offered bribes to legislators, state officials, newspaper editors, and other influential Georgians. Georgia’s citizens begged officials to do something about the rampant bribery, but Georgia Governor George Mathews signed the Yazoo Act on 1/7/1795 anyway. 

After the signing, 35 million acres (located in present-day Alabama and Mississippi) were transferred to four companies for the low price of $500,000 or about 1.5¢ per acre. These four companies were the Georgia Company, The Georgia-Mississippi Company, The Upper Mississippi Company, and the New Tennessee Company.

Georgians Fight Back

The signing of this act solidified one of the most corrupt deals in American history, which strained relations between the state and the federal government for a generation. Georgians did not waver in their anger, and public outrage continued after the signing of the act over the disingenuous deal that infuriated those who held honest claims to their lands. Over the course of the following months, U.S. Senator James Jackson became aware of the inner workings of this sale of the land and took action.

U.S. Senator James Jackson

Jackson resigned his seat in Congress and returned to Georgia to run for a seat in the Georgia Legislature in 1795. He organized other anti-Yazooers to win legislative seats, eventually gaining control of the Georgia Legislature. Jackson and his anti-Yazoo posse took over the seats of the corrupt politicians in 1796 and elected Jared Irwin as the new governor. 

Soon after taking office, Irwin signed a bill that nullified the Yazoo Act, and the state offered refunds to buyers. Most denied the refund and decided to hold onto the land instead. The state then ceded all lands west of Georgia’s present-day border to the federal government. 

All of this buzz generated around the Yazoo Act reached the Supreme Court in 1810. The case, Fletcher v. Peck, resulted in the first federal court decision overturning a state law in the U.S. The conclusion? The contract clause enacted between Fletcher and Peck couldn’t be invalidated by an act of the Georgia legislature, even if the land was illegally secured. 

Takeaways From the Yazoo Land Scandal

This historic land scandal exhibited the importance of property rights and the scrutiny of legal contracts. No matter how attractive a deal sounds, always do your due diligence and research the project in which you’re interested in investing. Real estate scams are not new and continue to work because individuals get swept up in too-good-to-be-true deals and don't know always see the red flags when being approached with such an opportunity.

Georgia's Yazoo Land Scandal

Most Common Real Estate Scams

As an agent, you’re responsible for protecting your clients’ interests and should be aware of common real estate scams and schemes. Here are the five most common real estate scams to keep an eye out for:

1. Escrow wire fraud: Scammers claiming to work with your client’s title or escrow company will reach out to them with instructions on where to wire their escrow funds. Fraudsters will go to great lengths to enact this ruse, even setting up fake websites that appear similar to the title or lending company your client is working with, making their request seem like the real deal.

2. Loan flipping: Loan flipping occurs when a predatory lender persuades a homeowner to refinance their mortgage repeatedly, often borrowing more money each time.

3. Foreclosure relief: Homeowners who fall on hard times and get behind on their mortgage payments can become desperate to save their homes. Scammers will swoop in with offers of foreclosure relief to capitalize on homeowners’ vulnerability. In reality, they’re just collecting a large upfront fee with no real intentions of helping the homeowner.

4. Rental scams: Scammers post fake property rental ads on Craigslist or social media using photos from other listings to lure in unsuspecting renters. Fraudsters, who have no connection to the property or its owner, will ask for an upfront payment to let your clients see the property (or hold the money as a “deposit”).

5. Moving scams: Your client has found a new place to call home, and now they have to find a way to move all of their belongings. They might fill out a form for a moving company estimate, outlining all their items, and receive an estimate for $4,000 to ship them from their current home to their new one. Once this is done, the “company” will raise the estimate and corner your client into paying more to give their belongings back.

If you see any sign of these common housing scams, report what you find to the Federal Trade Commission. For scams found online, file a report with the FBI Internet Crime Complaint Center.

Ready to Build Your Southern Empire With Real Estate Courses From The CE Shop?

Enroll in our Pre-Licensing program now to get your career started and begin connecting your neighbors with the home of their dreams. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything real estate-related in the South? Join the Southern Real Estate Facebook Group!