New York’s Attorney General Gets Tougher on Deed Thieves

New York Attorney General Letitia James has announced a new package of legislation to create the specific crime of “deed theft.”

Deed theft occurs when someone conveys a property deed to another party without the informed consent of the rightful owner. The new law against it is meant to bolster the remedies available under New York’s real estate deed protection measures, and to make prosecution easier whenever New York state residents fall victim to shady deed shifting.

Thousands of Claims, and Brooklyn’s Been Hardest Hit

Since 2014, New York City residents have complained to the Sherriff’s Office about nearly 3,500 cases of improper deed transfers. Most of them happened in the Brooklyn and Queens boroughs. While fraudulent, forged, or otherwise improper deed transfers can and do happen anywhere in the state, residents of Central Brooklyn get hit disproportionately.

The targets are often older residents and Black and minority homeowners in areas where property values are rising. State Senator Zellnor Myrie calls this “an exodus of longtime New Yorkers from the communities they’ve lived in for generations.”

Why couldn’t this be stopped? Because deed theft investigations are difficult to carry out and New York did not have the resources committed to deal with the problem. And those affected tend to be vulnerable and are not sure where to turn.

Queens District Attorney Melinda Katz took office three years ago, and has managed to recover five stolen homes for their scammed owners. Before then, the borough had no unit to address deed fraud. Now, New York has a Real Estate Theft Unit.

“Victims of deed theft are often older adults and people of color who are asset rich but cash poor,” Attorney General James said. The AG observed that deed scams not only take away their homes, but also “their most significant financial asset and the community they have known for their entire lives…”

How Do Deed Thieves Take Homes From Rightful Owners?

In the age of computers and digital records, it can be all too easy to track home values and to pinpoint targets for deed theft. The AG’s office points to forgery and fraud as typical methods:

  • Deed forgery involves placing a fake signature on a deed to be recorded — so the act of house-stealing looks like a normal transfer of property.
  • Deed fraud involves deceptive tactics to get homeowners to sign the deeds over to the deceiver.

Once the recorder of deeds accepts the instrument for the public records, the scammer might evict the rightful (but now former) owner.

An evicted homeowner winds up in housing court. Although courts can review the known facts, they can’t necessarily tell if the evictor holds the house by an ill-gotten deed. Many deed theft victims are forced to comply with their evictions. The new legislation would let homeowners put evictions on hold while suspected cases of deed theft are prosecuted and litigated.

If the package of new provisions is successfully written into New York law, prosecutors will be able to stick “red flags” on public records thought to involve deed theft. If a fraudster tries to borrow against a flagged property, lenders and title insurers will be warned.

Plus, the new law would override the traditional “good faith purchaser” claim to the home for anyone who buys from a scammer. The red flag would put potential buyers on notice that the seller’s ownership was being challenged. And the scammed homeowner would keep a right to recover ownership.

These provisions are hugely meaningful, especially as scammers often try to sell the homes quickly — to gain profits, and to distance themselves from the stolen deeds.

New Deed Theft Provisions: Both Civil and Criminal  

The new law, if it passes, will modify both civil and criminal law in New York. Some of the changes include:

  • Naming the actual crime of deed theft. Identity theft is a crime. But up until now, New York state has not named deed theft itself as a crime. The maximum penalty for deed theft in the first degree would be a mandatory prison sentence, which could be up to 25 years.
  • Giving the AG’s office concurrent jurisdiction over the crime, so the AG can prosecute these crimes without waiting for referrals from local district attorneys.
  • Amending the New York penal code to allow felony criminal prosecution of deed theft for eight years after the alleged crime.
  • Expanding the Homeowner Equity Theft Protection Act for owners with utility liens, so its protective provisions apply to owners whose homes are not yet in tax sales or foreclosures.

AG Letitia James was joined by the bill’s sponsors — Sen. Myrie, Sen. Brian Kavanagh, and Assemblymember Helene Weinstein — in announcing the three bills that contain these new provisions. The officials have asked the New York State Legislature to promptly pass the new deed protection laws.

The AG’s public release quotes Tamara del Carmen with the Brooklyn Legal Services Corporation, who notes that deed thieves have “been a persistent issue since the 2008 recession.”

“With another housing recession looming,” del Carmen said, it is imperative to quickly pass the bills.

The Backstory: A Continuing Thread

Last December, the AG charged a deed-theft ring with white-collar crimes involving deed forgeries in Queens. Five people were indicted for taking deeds by pretending to be senior or deceased homeowners, then re-selling the homes to investors.

In April 2023, another Long Island deed theft case made headlines. That deed was allegedly forged by a neighbor’s daughter.

Behind these lurid scenes, law enforcement was consolidating attention around the problem. AG James had established a project called Protect Our Homes, and brought multiple agencies together to share resources pertinent to property scams.

The state Senate held a public hearing in October 2022, and explored the problem of deed theft and the challenges it presents for law enforcement and the recovery of property. Nonprofits, policy makers, and housing advocates spoke at the hearing.

Victims of deed theft showed up, too, and recounted their compelling, painful experiences. By the time the hearing wrapped up, lawmakers were motivated to take new action.

Looking Ahead: A Blueprint for Keeping Deeds Safer

Deed theft is beyond traumatizing. It’s utterly devastating to its victims. Not even one New York household should have watched its life savings and its hopes for the next generation just drift away, without recourse.

“Deed theft doesn’t just rob someone of their home,” Assemblymember Linda B. Rosenthal pointed out in the Attorney General’s public announcement. “It upends their lives and often forces them into spending their entire life savings to regain possession of their house.”

The newly proposed threesome of laws signal that state’s legal leaders are taking the matter seriously.  

Supporting References

Letitia James, New York State Attorney General. Press Release: Attorney General James Takes Action To Protect New Yorkers’ Homes and Combat Deed Theft; New Legislation Would Make Deed Theft a Crime, Help Keep Families in Their Homes, and Expand Opportunities for Deed Theft Victims to Seek Justice (Apr. 27, 2023).

Rob Abruzzoso for the Brooklyn Daily Eagle: New Legislation Helps the Attorney General Go After Deed Theft (May 1, 2023).

And as linked. Photo credits: LoveBuiltLife, via Pixabay, and Heartfox via YouTube, CC-BY-3.0.