Property Title Fraud: Meaning, Types & Ways to Protect Yourself

Real estate is a high-value investment and thus involves a lot of risks in its transaction. One such risk is property title fraud. Generally, this fraud is performed by scammers on naïve buyers who don't have much knowledge of how to purchase a house or are dealing with difficult times like the death of the house owner.

Any mistake in identifying these scammers can result in losing your life's savings. So, keep reading to ensure you have full knowledge of property title fraud and its other details.

Property title theft, home title fraud, or deed theft all means the same, i.e., stealing property rights fraudulently. It is when scammers transfer property ownership without the knowledge or consent of the owner. They do so by fudging the papers to transfer ownership or borrow money, keeping the property as collateral.

The easiest targets of these scammers are elderlies who are the owner of a house or property or whose owner has recently deceased. So, when you realise they have committed fraud, it will already be late.

There are many ways in which home title scams can take place, but the most common one is forging your identity to transfer ownership to themselves through forging phoney deeds.

In contrast, criminals can also forge your signature and make you look like an individual willing to sell the property to him or her. The criminal can also forge your property papers while using illicit means to update the government about the change in ownership. Thus, once the ownership record gets updated in the municipal office document, he or she can take loans by mortgaging your property.

Apart from these, scammers can also illicitly sell your home, plot, or establishment to another person and get money against it. Then later they vanish out of the public domain.

Find details of different types of property title frauds here below:

1. Forged Deed Fraud

Forged deed fraud is when the criminal signs a sale deed in your name without you knowing. It is mainly performed by fraudsters who have a good connection in the municipal office and can easily change the public record without its owner knowing it. In this type of fraud, the scammer may create a new sale deed and make a notarised fraudulent signature.

2. Fake Title Fraud

Under this type of fraud, scammers form a fake identity using your name and take a mortgage or collateralised loan in lieu of your property. The process is also called fake title fraud. It is impossible to detect this fraud until the scammer stops making repayment and the concerned authorities reach out to the owner to realise it's a fraud.

3. Disputed Property Title

Another way criminals can scam you is by selling you a property with a disputed title, like having some dues on its name or listed as collateral with an NBFC or bank. So, you must conduct all due diligence to ensure your property is free of such issues.

4. Inconvenient Property Status

Criminals can also scam you into paying extra charges for a property purchased to convert its status from leasehold to freehold. It is another common scam, so you must check it before buying it.

5. Property Sold on Agricultural Land

It would help if you also looked through the status of the property land you are buying, as you can get scammed by purchasing a property built on agricultural land. Remember that any commercial and residential development on agricultural land requires a Change Land Use (CLU) approval.

Here criminals scam buyers by not informing them about the land status. This creates delay and additional charges for new buyers. Additionally, there can be a restriction on construction approval too.

Perform the following checks to avoid be a victim of property fraud:

• Pay attention to all your bills like water bills, electricity bills, mortgage bills, etc. If you notice that the bill amount is not as per expectation, it may signify home title fraud.
• Another step that you can take for home title fraud prevention is asking for your credit report. It gives details on whether someone has used your name to carry out any financial transaction or you have been a victim of identity theft.
• Use strong passwords for all your accounts and make sure they are unique.
• Be careful when dealing with suspicious mail, like do not open an attachment or make an action that involves payment.
• Take a home loan to buy a new house. It is a simple way to ensure the property is free of mortgage or collateral. Banks or financial institutions will approve your home loan request only when they are satisfied with the status of the home.
• Do due diligence before buying a property, like reviewing the title document and hiring a professional to check your legal heirship certificate.
• Verify the ownership of your property now and then.

If you have become a victim, then follow these below-mentioned steps for home title fraud protection:

• Reach out to your county recorder by sending them proof of your property being forged or mortgaged fraudulently.
• Contact your banking partner asking them to freeze your account as your scammer may use it to their benefit.
• Get help from an attorney with experience in home title litigation and real estate fraud.
• Contact your insurance company to check if they cover post-closing forgery expenses.

Property title fraud is common, and anyone can become its victim. However, knowing in detail how scammers perform it and their type, you are already taking one step towards protecting yourself against it. Find more tips on how to save yourself in the above section.