State Legislation Seeks To Combat Deed Theft

New state legislation seeks to combat deed theft by strengthening protections and remedies for victims.

Deed theft occurs when someone takes the title, or deed, to another person’s home without the homeowner’s knowledge or approval. According to the office of Attorney General Letitia James, New York’s current laws limit opportunities for prosecutors to hold deed thieves accountable. This legislation, sponsored by state senators Brian Kavanagh and Zellnor Myrie and assembly member Helene Weinstein would make deed theft a crime and help New Yorkers keep their homes.

“No one’s home should be stolen by a scammer without warning or reason,” James said in a statement on Thursday, April 27. “Victims of deed theft are often older adults and people of color who are asset rich but cash poor. Homeownership is a stabilizing economic force for their families and loved ones, and deed theft robs them not just of their family home, but of their most significant financial asset and the community they have known for their entire lives. This legislation will provide real and necessary changes to our civil and criminal laws to stop the perpetrators of these crimes and provide the protections and remedies needed to keep people in their homes.”

Kavanagh, the chair of the Senate Housing Committee, added that in a public hearing in October, the committee heard harrowing, infuriating testimony about deed theft.

“We learned a lot about how it works, and about how difficult it is to prevent, prosecute, or undo under current laws and real estate practices,” the senator said. “We’ve been working diligently since then and we are prepared to act. … It is for all those who have been robbed of their home and whose communities have been targeted — and for all those at risk of suffering a similar fate — that we must act now.”

The most common ways scammers steal deeds are through forgery or through fraud, according to the attorney general’s office, and in cases that involve forgery, scammers fake the real 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. These thieves then often evict the homeowner and sell the property at a significant profit.

The proposed legislation includes two bills, one that would establish a crime of deed theft as a felony. Offenders could face a prison sentence of up to 25 years. The second bill would void good faith purchaser protections in cases of deed theft.

Currently, when a deed thief sells a house to an innocent third party, the third party can keep the house and the original owner can be evicted. The bill would enable prosecutors to file a legal action creating a “red flag” on a property that would show up when a thief tries to take out a loan against the property or sell it.

The bill would further enable a victim to get a stay on an eviction proceeding brought by a deed thief while the theft is being litigated. It would also expand Homeowner Equity Theft Prevention Act protections to homeowners in distress whose properties are on the utility lien sale list.