By K. Michelle Lind

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 [https://www.aaronline.com/wp-content/uploads/2023/06/06/ALTA-Seller-Impersonation-Handout.pdf] 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:
  • non-owner-occupied or vacant
  • owned free and clear
• The Seller
  • is out-of-state and will not meet in person
  • communicates only via email or text 
  • has a different address than the property address or tax mailing address
  • wants a quick, below market price cash sale
  • insists on using their own remote notary
  • 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