New Legislation Would Make Deed Theft a Crime, Help Keep Families in Their Homes, and Expand Opportunities for Deed Theft Victims to Seek Justice
On April 28, New York Attorney General Letitia James, State Senator Brian Kavanagh, State Senator Zellnor Myrie, and Assemblymember Helene Weinstein announced new legislation to strengthen protections and remedies for victims of deed theft and bolster the Office of the Attorney General’s (OAG) ability to prosecute these crimes. Deed theft is a growing problem that predominantly targets Black and Brown homeowners, and under New York’s current laws, opportunities for prosecutors to hold deed thieves accountable are limited. The two bills — one addressing criminal challenges and the other focused on changes to civil laws — would establish a crime of deed theft and help keep New Yorkers in their homes.
“No one’s home should be stolen by a scammer without warning or reason,” said Attorney General James. “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. I want to thank State Senator Kavanagh, State Senator Myrie, and Assemblymember Weinstein for their partnership in these critical efforts to keep New Yorkers in their homes.”
“At our public hearing in October 2022, my colleagues on the Housing Committee and I heard harrowing, infuriating testimony about the all too common crime of deed theft,” said State Senator Kavanagh, Chair of the Senate Housing Committee. “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. We’ve been working diligently since then and we are prepared to act.
“I have been fighting to help hardworking homeowners in stay their homes for many years, and in particular, against the awful form of fraud known as deed theft,” said Assemblymember Weinstein. “This type of fraud often takes advantage of the most vulnerable New Yorkers, literally ripping their homes away from them and profiting greatly from the equity seized. I have sponsored deed theft legislation in the past, but it is clear that the Attorney General and our District Attorneys need better tools to stay ahead of the fraudsters. I am particularly pleased and grateful that Attorney General Letitia James has devoted ample resources to the fight against deed theft and am proud to join her in her efforts to fight these cruel thefts.”
Deed theft occurs when someone takes the title, or deed, to another person’s home without the homeowner’s knowledge or approval. It has become a popular tactic used by scammers to illegally obtain ownership of a property, and disproportionately impacts elderly homeowners and homeowners of color, especially Black and Brown homeowners in gentrifying neighborhoods.
From 2014 to the present, the New York City Sheriff’s Office counted nearly 3,500 complaints of deed theft throughout New York City, with more than 1,500 complaints in Brooklyn and 1,000 from Queens. Deed theft scams are not just limited to New York City. Throughout the state, District Attorneys in Albany, Erie, Monroe, and Onondaga Counties have reported recent active deed theft complaints. As part of the legislation, the New York State Department of Criminal Justice Services would collect statewide data on deed theft crimes, which will further aid efforts to combat this scam.
The most common ways scammers steal deeds are through forgery or through fraud. 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.
Under current law in New York state, deed theft itself is not a crime, and there are not adequate protections in place to slow down or stop a deed theft in process. Today Attorney General James, State Senator Myrie, State Senator Kavanaugh, and Assemblymember Weinstein are introducing two pieces of legislation that would address these issues by creating new criminal and civil legal provisions to increase enforcement opportunities and help keep New Yorkers in their homes.
S6569: OAG Program Bill sponsored by State Senator Myrie
1) Establish a Crime of Deed Theft
Challenge: Currently, the only factor that determines the severity of a deed theft is the value of the stolen property. This is limiting as it fails to evaluate whether or not a property is someone’s home or livelihood. Some judges and prosecutors have even stated that they are not aware of deed theft.
Change: This legislation addresses those current limitations by amending the Penal Law to establish a crime of deed theft:
- Deed Theft in the Second Degree, a Class C Felony: Theft of one real property.
- Deed Theft in the First Degree, a Class B Felony: Theft of one residential real property or the theft of two or more real properties. The maximum penalty for Deed Theft in the First Degree would be a mandatory sentence of one to three years in prison, up to 25 years.
2) Grant OAG Criminal Jurisdiction
Challenge: OAG does not have jurisdiction to prosecute criminal deed theft cases without a referral, and sometimes referrals can be difficult to secure when a homeowner’s complaint is submitted directly to OAG.
Change: The legislation grants OAG concurrent original jurisdiction to prosecute deed theft crimes alongside District Attorneys throughout the state.
3) Extend the Statute of Limitations
Challenge: Too often, victims of deed theft are not aware of the crime until after it has occurred. Under the current statute of limitations, OAG and prosecutors are forced to either rush investigations or lose the ability to prosecute the case under criminal law.
Change: This bill extends the statute of limitations for felony criminal prosecution of deed theft from five years to eight years, allowing for more time to identify and investigate cases.
S6577/A6656: Sponsored by State Senator Kavanagh and Assemblymember Weinstein
1) Void Good Faith Purchaser Protections
Challenge: Under current law, once a scammer has obtained the deed to someone’s home through forgery or fraud, there are very few legal remedies available to homeowners and prosecutors to stop or reverse the fraud. For example, if a scammer illegally steals the deed to a person’s home and then sells it to an innocent third party unaware of the scam, that new buyer is considered a “good faith purchaser.” The law protects the new buyer’s right to the property they purchased, regardless of how the seller, or scammer, obtained the property. As a result, homeowners who have been evicted as a result of a deed theft scam are often unable to get their homes back, even if the court finds the scammer guilty of deed theft.
Change: This legislation enables prosecutors to file a legal action on properties where a deed theft has taken place or is suspected, which acts as a sort of legal “red flag” on the property’s records. If a scammer then attempts to take out a loan against the property, banks or title insurance companies will see the red flag and know not to provide a loan. This provision would also eliminate a potential good faith purchaser’s protected claim to the home, as they would have encountered the red flag in attempting to buy the property from the seller, and therefore would have known they were buying a home from a seller whose ownership was in dispute.
This legislation also includes a provision to void good faith purchaser protections. Typically, when a home is sold and the deed is transferred legally, the rightful homeowner and seller either pays off the rest of the existing mortgage on their house with the funds from the sale, or the mortgage is transferred to the new owner. When scammers illegally steal the deed to a home, the homeowner’s mortgage is often not paid off, as the home was stolen, not sold. In cases where a third party purchased a property where the mortgage was neither transferred nor paid, this legislation would void that buyer’s claim to the property, enabling it to be returned to the rightful homeowner.
2) Stay Eviction Proceedings
Challenge: Currently, if a scammer has stolen the deed to a home and attempts to evict the rightful homeowner, that eviction case will go to housing court. Housing court looks at the facts of any given eviction case and cannot determine whether or not the evictor is actually the rightful owner of the property. This is how many victims of deed theft end up forced out of their homes.
Change: This legislation would make it possible to keep New Yorkers in their homes and stay an eviction proceeding in housing court when the rightful homeowner can show reasonable evidence that there is an issue with the title of the property or a potential deed theft in progress. Homeowners would be able to pause their evictions in housing court until the suspected deed theft case has been litigated.
3) Expand Existing Protections
Challenge: The Homeowner Equity Theft Prevention Act (HETPA) allows homeowners in distress the opportunity to cancel any contract to sell their property, whether they signed it knowingly or a scammer took advantage of their vulnerability. These protections are currently only available to homeowners whose properties are in foreclosure or on the tax lien sale list, but not to homeowners whose properties are on the utility lien sale list.
Change: This legislation includes a provision to expand the protections of HETPA to include homeowners with active utility liens.
Attorney General James has taken significant action to protect New York homeowners and combat deed theft. In December 2022, she announced the indictment of five members of a deed theft ring for allegedly stealing three homes worth more than $1 million in total from elderly, vulnerable homeowners in Queens. In February 2021, Attorney General James announced an $800,000 grant, funded by OAG settlements, to the New York City Department of Housing Preservation and Development and the Center for New York City Neighborhoods as part of a program aimed at increasing awareness of deed theft in vulnerable neighborhoods. In January 2020, Attorney General James launched the Protect Our Homes initiative and announced the formation of an interagency law enforcement task force to respond to Deed Theft and other real estate fraud. In January 2019, Attorney General James announced the sentencing of a Brooklyn scammer for Deed Theft of two homes in Central Brooklyn.
New Yorkers who believe they are a victim of deed theft are encouraged to contact OAG by calling 1 (800) 771-7755, emailing deedtheft@ag.ny.gov, or filing a confidential complaint online.
The Homeowner Protection Program, a network of housing counselors and legal services providers throughout New York supported by OAG, offers free housing counseling and legal assistance statewide. Homeowners can contact HOPP online or call 1 (855) 466-3456 to get help.
