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Deed fraud. You
have heard about it and read about it.
You may have been a victim or know someone who was. Last August the Attorney
General's Office warned Arizona homeowners about deed fraud with
an informative video on the crime by a Special Investigator.
The Crime
The United
States Secret Service Cybercrimes Investigations Field
offices have reported a sharp increase in deed fraud crimes associated with
unencumbered (lien-free), non-owner-occupied properties,
such as vacation homes, rental properties, investment properties, and vacant
properties. Criminals posing as “out of
town” property owners are listing these targeted properties, falsifying
documents, impersonating the notary, and absconding with the proceeds at close
of escrow.
Now there are some tools to help combat this crime.
ALTA Seller Impersonation
and Deed Fraud “Red Flags” and Precautions Information
Real estate industry
partners must work together to educate ourselves and others about these
fraudulent schemes to help prevent them.
The American Land Title Association (ALTA) has published this flyer Deed
Fraud Flyer listing the deed fraud “red flags” to watch for and the
precautions to take to protect property owners and the industry for this
increasingly common crime. Please share
this ALTA flyer with your broker, office, escrow/title company, and local association.
County Recorder Alert Systems
The Pinal and Yavapai County Recorders have a system
that allows property owners to sign up to receive an alert whenever a document
is recorded that mentions their name.
The Maricopa County Recorder’s Office is launching a similar opt-in alert
system to combat deed fraud. See, Amid
a rise in title theft, Maricopa County launches new alert system
(azcentral.com).
All of Arizona’s counties are required by a new law (SB
1110) to offer similar alert systems by 2025.
The system will be voluntary, and the notice may be provided by email,
text, or other similar means. A.R.S.
§11-467.
These notification systems will alert owners if their
property has been subject to deed fraud.
This early warning will assist owners and law enforcement in the
investigation and prosecution of deed fraud criminals.
Common Deed Fraud “Red Flags”
Below are some deed fraud
red flags to be aware of and report to your broker and at https://www.azag.gov/consumer
if fraud is evident.
·
The property is:
o
non-owner-occupied or vacant
o
owned free and clear
·
The Seller
o
is out-of-state and will not meet in
person
o
communicates only via email or text
o
has a different address than the property
address or tax mailing address
o
wants a quick, below market price cash
sale
o
insists on using their own remote notary
o
wants sale proceeds wired
For More Information
·
Title Talk – Entity Hijacking/More Deed
Fraud: https://www.aaronline.com/title-talk/
·
Arizona Attorney General Deed Fraud: https://www.youtube.com/watch?v=cqmyE7qDsJo
·
American Bar Association – How to Avoid
Title Fraud on Your Property: https://www.americanbar.org/groups/senior_lawyers/publications/voice_of_experience/2022/october-2022/how-to-avoid-title-fraud/
K. Michelle Lind, Esq. is an attorney who currently serves Of Counsel to the Arizona REALTORS®. She is also the author of the book - Arizona Real Estate: A Professional's Guide to Law and Practice (3rd Ed.) .
For more real
estate related articles, visit Michelle’s Blog at Arizona Real Estate – A Professional’s Guide to Law
& Practice. (arizonarealestateprofessionalguide.blogspot.com)
This article is
of a general nature and may not be updated or revised for accuracy as statutory
or case law changes following the date of first publication. Further, this
article reflects only the opinion of the author, is not intended as definitive
legal advice and you should not act upon it without seeking independent legal
counsel. 6/1/23
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