by Mike Colpitts 
Deed theft running rampant in Florida and much of the rest of the U.S. often makes it tough on consumers.- The FBI says Florida is experiencing higher levels of deed theft but closing agents are prohibiting many fraudulent deals from happening.
- A property title freeze system may soon be implemented in Florida.
Deed theft is running rampant in Florida and other states in the U.S. as scammers shop for ways to get rich at the expense of innocent victims. Deed theft, which is when someone transfers the legal title to property without the real property owner knowing about it now makes up more than an estimated $30-million in transactions a year in Florida alone.
The majority of the transactions involve vacant land. Nearly two out of three deed thefts are committed involving bare land, while only 16 percent are single family homes. Many thefts are committed using fraudulent id’s representing the sellers in foreign countries. Scammers forge documents using not only fake id’s but also recently opened bank accounts, to which they have funds wired.
“Vacant parcels of land are a favorite target among title pirates because they are not occupied, and they are not usually closely monitored by their actual title owner, who may even be located out of state,” said Miami attorney Victor Petrescu, who represents victims of real estate scams.
Petrescu said properties owned by deceased individuals or investment companies are frequent targets. In one Florida case, a group forged quitclaim deeds and powers of attorney to seize 44 homes – 18 of which were owned by the estates of dead individuals. They rented, sold and sometimes lived in the stolen properties before they were eventually caught.
The FBI says the illegal land grab is a growing international criminal enterprise often orchestrated by foreign actors who transfer the monies from one account to another quicker than authorities can intervene. Fraudsters use forged documents, fake driver’s licenses, and falsified corporate paperwork to make it appear they own a property. Then, they can take out loans, rent the property or sell it to an unsuspecting buyer.
Scammers “will look through land records of each county, and vacant land is a top target,” said Tim Cronkright of Certif-ID, a fraud prevention firm. “They’ll look at the records for the individual who owns it and will create an identity to line up with the ownership record. They’ll then go solicit a member of the MLS to list the property they don’t own.”
Once the property is listed by an unsuspecting real estate agent, the illegal land grab can unfold quickly – often involving a cash buyer, who is offered a great discount on a property in order to entice the prospective buyer to purchase a property. The scammer often arranges a quick transfer of funds before they disappear. “All of a sudden, days, weeks, months, maybe even years later, the rightful property owner learns the land was essentially stolen from them,” Cronkright said.
A 2023 survey by Certif-ID found that 54% of real estate professionals experienced at least one seller impersonation fraud attempt within six months, and almost one out of five (17%) title companies reported sending money to incorrect accounts due to fraud last year. About half of those incidents happened more than once, according to the American Land Title Association.
Realtor associations across the nation and state legislatures are looking for ways to safeguard against the crime. An overwhelming majority of associations, 83% of those surveyed, favor a system that would electronically notify property owners. Systems are already in place in Arizona, California, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Nevada, Ohio, Pennsylvania, South Carolina, Tennessee and Washington.
Another way to protect property owners from fraud is a property title freeze system. The solution works similarly to a credit freeze, which prevents unauthorized title transfers. States such as Arizona, Indiana and South Carolina have implemented this approach.
The Florida Association of Realtors is considering a proposal to offer to state lawmakers to protect property owners in the state.