Deed fraud or home title theft describes schemes involves forging documents to record a phony transfer of property ownership. Criminals can then sell the home, take out a mortgage on it, or even rent it out to tenants to turn a profit. Although there are no national statistics tracking home title theft, the FBI's 2023 Internet Crime Report tracked 9,521 complaints of cyber-related real estate and rental fraud last year, with losses totaling more than $145 million. Deed fraud is happening all over the country, even here in New Jersey. In May of 2024, the FBI's Newark office posted a warning that "Fraudsters Are Stealing Land Out from Under Owners," describing this not uncommon scenario:
"It begins when a real estate agent gets a solicitation from a fake property owner wanting to sell their vacant lot in a rural community. A for sale sign goes up on the land. The seller asks for an all-cash sale and a quick closing. Within weeks, the deal can be done."
"Meanwhile, the real property owner has no idea their land has just been sold out from under them. It's vacant land fraud, and it's happening at an alarming pace in New Jersey and around the country."
In February of 2023, the New Jersey Attorney General announced that 2 men had entered guilty pleas in a scam using bogus deeds to deceive and defraud real estate investors out of over half-a-million dollars.
Deed Fraud schemes commonly involve violations of New Jersey's criminal code offenses of Forgery, Fraud Relation to Public Records, Falsifying or Tampering with Records and even Identity Theft. Federal criminal offenses are also implicated.
Property owners should not just assume that someone at the county clerk's office will know when someone is presenting a fraudulent document to be filed. As long as a document meets statutory recording guidelines, New Jersey law requires the county clerk to accept and record the document.
What can you do to protect yourself from Deed Fraud? Many county clerk's office, where deeds and other property records are filed, now have notification services that will notify you if a filing is made using your name or property that is owned by you. Property owners are strongly urged to sign up for these notification systems, so you will get notified if someone make a filing affecting one of your properties. Look for the section regarding "Property Alert Service" on the county clerk's website for the county in which you live and in any other county where you own property.
Routine checks of your credit reports and your utility bills can also help uncover deed fraud. If one of your utility bills or your property tax bills stop arriving in the usual manner, it may be an indication that someone has changed the filling address.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
