New York is taking steps to protect people from deed theft.
Gov. Kathy Hochul signed legislation Tuesday to shield New Yorkers from the practice in which property owners are defrauded out of the property titles to their homes.
The legislation enhances protections by empowering the state attorney general and local district attorneys looking into cases of deed theft to pause related eviction and ownership dispute proceedings, while also expanding the list of crimes that allow prosecutors to invalidate fraudulent sale and loan documents.
Signing the legislation in Brooklyn, Hochul stressed the importance of these protections in ensuring New Yorker’s property rights.
“This legislation is New York’s strongest tool yet to crack down on illegal deed theft and put the American Dream back in the hands of thousands of New York homeowners,” she said. “Deed theft cheats hardworking New Yorkers out of the opportunity to own and keep their homes and forces families out of their communities – particularly in Black and Brown neighborhoods. With the protections enshrined in this legislation, however, we are empowering homeowners and law enforcement to fight back against deed theft and keeping families, homes, and communities intact. I thank Attorney General James and the bill sponsors for their partnership in our mission to protect New York homeowners and for joining my administration’s continued effort to stop fraud, forgery, and abuse.”
Deed theft occurs when someone steals the title to a home without the homeowner’s knowledge or approval. This is most often done through forgery, when a scammer fakes a homeowner’s signature on a deed and files it with the county clerk, or when a homeowner unwittingly signs the deed over to a scammer.
New York Attorney General Letitia James condemned the practice, and highlighted its negative impact on New Yorkers while touting the legislation's protections.
“Deed theft robs New Yorkers, especially older adults and people of color, of the generational wealth built through owning their homes,” she said. “The perpetrators of deed theft force their victims to endure humiliating and terrifying situations, often evicting families from their homes. That is why I drafted and advanced legislation to address this problem and empower New Yorkers, and have used my office to go after deed theft perpetrators and raise awareness about this crime."
The attorney general, local district attorneys, and other law enforcement investigating deed theft can now move to stay any legal proceeding where possession or title to a property is at issue. That includes foreclosures, evictions, and ownership disputes. It also requires courts to grant the stay in the case of ongoing investigations or where the government has initiated civil or criminal actions. If the attorney general finds probable cause, the attorney general and district attorneys are now able to file a notice of pendency as a "red flag" to alert buyers and lenders to title issues to help stop further transactions from happening.
The legislation also expands the ability of prosecutors to move to void fraudulent instruments affecting ownership of and interests in property while allowing the attorney general to do so in addition to district attorneys.
In addition, unless a defendant can prove otherwise, the legislation creates a legal presumption that a deed transfer was fraudulent in civil disputes over ownership when a party to the transfer has been convicted of deed theft or related fraud with respect to that property, which helps victims of deed theft fighting to maintain their ownership rights in civil court. It also establishes that a buyer or lender had notice of fraud if they actually knew or should have known fraud occurred, which can help victims challenge transfers as invalid when the buyers or lenders should have been aware of the fraud.
According to the New York City Sheriff’s Office, there have been at least 3,500 deed theft complaints filed in New York City in the past 10 years. New Yorkers are encouraged to report deed theft and other scams to the attorney general’s office by calling 800-771-7755 or filing a complaint here.