New Law Combats Deed Theft - 27 East

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New Law Combats Deed Theft

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Governor Kathy Hochul signs legislation on November 14 to protect New Yorkers from deed theft, a practice in which property owners are defrauded out of the property titles to their homes. SUSAN WATTS/COURTESY OFFICE OF GOVERNOR KATHY HOCHUL

Governor Kathy Hochul signs legislation on November 14 to protect New Yorkers from deed theft, a practice in which property owners are defrauded out of the property titles to their homes. SUSAN WATTS/COURTESY OFFICE OF GOVERNOR KATHY HOCHUL

authorStaff Writer on Nov 19, 2023

Governor Kathy Hochul has signed into law legislation that protects homeowners from deed theft — the practice of defrauding homeowners from the property titles to their homes — and makes it easier for prosecutors to invalidate fraudulent sale and loan documents.

The new law empowers the state attorney general and local district attorneys who are investigating or litigating deed theft to pause related eviction and ownership dispute proceedings. It also expands the list of crimes that allow prosecutors to invalidate fraudulent sale and loan documents, among other measures.

Hochul signed the legislation on November 14 in Brooklyn alongside Attorney General Letitia James, members of the State Legislature, legal services advocates and victims of deed theft.

“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,” Hochul said in a statement. “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.”

James said: “Deed theft robs New Yorkers, especially older adults and people of color, of the generational wealth built through owning their homes. 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.”

Upon finding probable cause or filing criminal charges, the attorney general and district attorneys now may file a notice of pendency as a “red flag” to make buyers and lenders aware of title issues to help stop further sales of a home from happening.

The legislation also expands the ability of prosecutors to move to void fraudulent instruments affecting ownership of and interests in property by adding to the list of crimes that can be the basis for voiding the instruments and, for the first time, allowing the attorney general to do so in addition to district attorneys.

When someone in an ownership dispute has been criminally convicted of deed theft, this new law requires a legal presumption in civil court that a deed transfer was fraudulent. It also helps victims of deed theft to invalidate property transfers by establishing that a buyer or lender had notice of fraud.

“This legislation addresses many of the shortcomings in our laws that have allowed the outrageous crime of deed theft to occur all too frequently, and that prevented these cases from being resolved in a just manner,” said State Senator Brian Kavanagh, a sponsor of this legislation and the chair of the Senate Housing Committee. “Its enactment today is an important victory for many New Yorkers who have been robbed of their homes and whose communities have been targeted, and for those at risk of suffering a similar fate.”

The most common ways scammers steal deeds are through forgery or through fraud, according to the attorney general’s office. In cases that involve forgery, scammers fake the homeowner’s signature on a deed and file it with the county clerk to make it look like they bought the property. In cases that involve fraud, homeowners are tricked into unknowingly signing over their homes to a scammer.

New Yorkers can report deed theft and other scams to the attorney general’s office by calling 800-771-7755.

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