Governor Signs Deed Theft Protection Bill

Gov. Kathy Hochul moved to protect NY homeowners from deed theft by pausing evictions and empowering prosecutors to invalidate fraudulent sale and loan documents.

New York Gov. Kathy Hochul
New York Gov. Kathy Hochul

NEW YORK—New York Gov. Kathy Hochul signed legislation on Nov. 14 to protect New Yorkers from deed theft, a practice in which property owners are defrauded out of the property titles to their homes.

The bill—S.6577/A.6656—enhances deed theft protections by empowering the Attorney General and local District Attorneys investigating or litigating deed theft to pause related eviction and ownership dispute proceedings and expand the list of crimes that allow prosecutors to invalidate fraudulent sale and loan documents, among other measures.

Gov. Kathy Hochul signed the legislation 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,” Gov. Hochul 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.”

New York Attorney General Letitia James added, “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. I thank Senator Kavanagh and Assemblymember Weinstein for sponsoring this bill, and I commend Gov. Hochul for signing it into law. The reforms made through this new law will help protect New Yorkers and better enable them to combat those who try and steal their deeds, their wealth, and their American Dream.”

Deed theft occurs when someone takes the title to someone’s home without the homeowner’s knowledge or approval, most commonly through forgery, when a scammer fakes a homeowner’s signature on a deed and files it with the county clerk, or fraud, when a homeowner unwittingly signs the deed over to a scammer. 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.

The new law establishes several new measures to enhance deed theft protections for New Yorkers. The legislation empowers the Attorney General, local District Attorneys, and other law enforcement investigating deed theft to move to stay any legal proceeding where possession or title to a property is at issue—such as foreclosures, evictions, and ownership disputes—and requires courts to grant the stay if investigations are ongoing or the government has initiated civil or criminal actions. 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 transactions 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.

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, state officials noted,

The legislation also extends the protections of the State’s Home Equity Theft Prevention Act, which governs the sale of homes that are in foreclosure or in default, to allow homeowners the ability to cancel any contract to sell their property if they are on a utility lien list.

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.

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