Deed Fraud is on the Rise
Across Ohio and throughout the country, a rising trend in fraudulent real estate activity is putting both consumers and real estate professionals at risk. The Ohio Department of Commerce’s Division of Real Estate and Professional Licensing has issued warnings to licensees and the public about fake property listings and deed fraud.
What is happening?
Scammers are impersonating property owners — often of vacant lots, unoccupied homes or investment properties — and contacting real estate agents to list the property for sale. They use forged documents and fake identification to attempt to illegally transfer property titles and profit from the fraudulent sale.
This type of crime is difficult to detect without thorough verification and communication between all parties involved in a transaction. As fraudulent techniques become more advanced, practical measures are essential.
Ohio Division of Real Estate & Professional Licensing Tips:
- Exercise Due Diligence: When approached to list a property, do thorough research and verification. Avoid rushing into listing agreements without conducting proper due diligence on the ownership of the property.
- Be Vigilant and Attentive: Be alert during interactions with clients and always pay attention to details. Request photo identification to validate the identity of individuals involved in transactions. Stay vigilant for signs of fake identification and promptly report any suspicions to your broker or appropriate authorities.
- Multiple Owners: In listings involving multiple owners, ensure that all owners provide their signatures on agreements. This includes, but is not limited to, both spouses, siblings, heirs and all members of an LLC to prevent complications.
- Verification: Utilize resources such as the auditor's site and recorder's office to confirm ownership details. Verify the authenticity of documents to protect against fraudulent activities.
- Client Pressures: Do not succumb to clients who pressure you to list properties quickly at the cost of thorough procedures. Prioritize compliance with regulations and safeguarding the interests of all parties involved.
Key safeguards to help prevent deed fraud.
Multiple stakeholders across the real estate transaction process play a critical role in detecting and preventing fraudulent activity, including:
- County Auditors & Recorders may have consumer alerts that inform property owners when a document has been filed in their name.
- Notaries can be the first line of defense against forgeries by verifying identifications.
- Title companies must also verify the identity of the seller.
- County Auditors ensure compliance with conveyance standards.
- County Recorders may refuse to record an instrument if they have reason to believe it is false or fraudulent.
REALTORS® have an important responsibility to help stop these schemes before they reach the closing table. When listing a property, licensees should:
- Request and verify government-issued photo identification.
- Conduct independent research to verify property ownership.
- Ask additional questions if something seems unusual or inconsistent.
- Report suspicious behavior to the proper authorities, including the Division of Real Estate.
The National Association of REALTORS® issues a release on recommendations to help combat the rise in deed fraud. They are partnered with the American Land Title Association, AARP, the Mortgage Bankers Association, the National Notary Association and the Property Records Industry Association to come up with ways to help prevent and mitigate deed fraud. See the full release here.
Ohio REALTORS® Commitment.
Ohio REALTORS® is working with industry stakeholders and partners throughout the state to ensure that consumers and real estate licensees are protected from fraudulent listings and illegal property transfers. Our association will continue to assess this issue, support protective legislation and educate members on best practices to safeguard transactions.
For more information, you can visit the Ohio Division of Real Estate & Professional Licensing’s Advisory.
