Their Central Florida property was stolen and sold. It happens often
Orlando Sentinel (FL)
A Canadian couple was surprised to learn last summer that their Lake County investment properties had been sold.
They’d owned the two single-family lots for over a decade, never put them up for sale, nor intended to part with the land. Experts say it happens increasingly often.
The family had fallen victim to deed fraud, a cybercrime with thousands of cases around the country, where a scammer takes ownership of a property by forging deed documents and submitting them to county officials.
“They have notarized documents … and they’re all fake,” said Xiao Zhuo Jia, the couple’s adult son who helped unravel the mess. “In this case, you can see the signature: you can tell what letters they’re writing and it does not match my parents’ name.”
The two lots were purchased in 2007 when a developer traveled to Canada pitching a future subdivision as a perfect investment amid a housing boom, he said. But soon after the market crashed and a recession ensued; the properties were never built. The lots have been mostly vacant since, Jia said.
Experts say that makes a property owner particularly vulnerable.
The scheme is known by a range of terms like property theft, deed theft and house stealing, and is particularly common in Florida due to high numbers of foreign owners of land and vacant land, said Mickey Godat, the president of the Florida Land Title Association.
“These transactions come up every single day around the state,” said Godat, whose office is in Lake Mary. “It’s really ramped up in the past year.”
It happens several ways, he said: Somebody gets a fraudulent deed and transfers the property into their own name; somebody steals the identity of an owner and sells the property; or somebody fraudulently takes over a company that owns the land.
As the scale of fraud has exploded, Godat said title insurance companies this year began further scrutinizing deeds to see if any recent transactions happened for little or no value. They’re also trying to make contact with buyers and sellers and trying to match signatures if examples exist in the public record.
Properties without mortgages on them and those that are vacant or owned by absentee or international owners are targets of fraudsters, he said.
“Right now, we’re looking at every one of those transactions as fraudulent,” he said.
Few fraudsters are caught and prosecuted, though earlier this year, the Broward County Sheriff’s Office arrested two women, who one investigator said acquired 67 properties statewide fraudulently, though some were outside of the statute of limitations, the Sun-Sentinel reported. They were charged with scheme to defraud, grand theft and elderly exploitation, the newspaper reported.
County clerks and comptrollers who record deeds and public records legally must file them if they’re properly filled out, and cannot refuse a potentially fraudulent document, said Orange County Comptroller Phil Diamond.
He and other local officials have established alert systems that property owners can sign up for and be notified by email if a record is submitted in their name. While it can’t stop fraud from happening, it at least notifies a victim early, he said.
“That’s one of the reasons why I started this service: we’re required to record documents that meet the standards of a Florida deed and I wanted to make sure we were doing everything we could do to protect the citizens of Orange County,” Diamond said.
About 40,000 residents have signed up since 2018, he said.
In Lake County, official records manager Holly Vaughn said more than 3,600 property owners have signed up.
Seminole and Osceola counties also have alert systems.
“It’s an early detection system and that’s crucial when you’re trying to combat property fraud,” Vaughn said.
Cases of fraud have been documented from coast to coast, prompting a member of Congress to file legislation in hopes of curbing the crime.
Missouri Rep. Emanuel Cleaver, D-Kansas City, filed legislation last month called the Good DEED Act, which would define deed fraud in U.S. law and require the FBI to track it in its annual Uniform Crime Report.
“It’s important right now more than ever because one of the most difficult things to acquire right now is a home,” said Cleaver, who chairs a House subcommittee on Housing, Community Development, and Insurance.
His bill, filed in October, also provides funding for programs that detect and prosecute the fraud and requires states that receive the funding to require fingerprints and other identifying information for people who submit deeds.
While Democrats lost control of the House in the midterm elections and Cleaver will have to give up his chairman post, he said he’s willing to work with anyone to move the legislation.
“You can’t fight something if you don’t name it,” he said.”We have to define it, and then we’ve got to find out how widespread it is.”
After months of work to sort out the mess, Jia’s family ultimately decided to sell their property to the company that purchased the lots from the fraudsters. The homebuilder thought the sale was legal, he said, and had already started laying the foundation and preparing for construction.
“Fortunately, we didn’t have to involve a lawyer because both sides wanted to come to the table,” he said.”It was a stressful, stressful few months to get this sorted out.”