Stealing Houses by Words and Deeds

On December 8, 2008, the new Uniform Municipal Deed Registration Act took effect in Pennsylvania, providing a more timely process for recording deeds in counties and also for registering deeds in local municipalities.

Its purpose is to counteract land fraud by requiring prompt public recording of land transfer documents and by allowing municipalities to set additional local requirements in a uniform manner.

The PA UMDRA was signed into law on October 9, 2008 as Act 110 of 2008 (formerly H.B. 1634, P.N. 4003). It establishes uniform procedures for a local municipality to provide a registry for deeds or conveyances in addition to the recording of documents with a county recorder of deeds. A municipality cannot require a county to effect a parallel municipal registration of such documents, but a municipality and a county's recorder of deeds may enter into an agreement whereby the county will share information regarding conveyances of property.

The Intelligencer (Philadelphia, PA) published an article on December 24, 2008, entitled "New law helps limit deed fraud" by Amanda Cregan, who quoted the Montgomery County Recorder of Deeds as to the new law's effect:

Montgomery County Recorder of Deeds Nancy J. Becker says the new law not only streamlines the process among municipalities and counties, but also protects the new homeowner.

“We're really delighted because, if for any reason, if there is a delay in recording a deed, the possibility of fraud being committed against that property increases,” said Becker, in her fifth year in office. “If people aren't paying attention and deeds aren't being recorded in a timely fashion, then things can happen.”

In the gap between when a homeowner purchases a home and when the deed is recorded, a thief can obtain a copy of that deed and have it transferred fraudulently. * * *

Land fraud, based on bogus conveyancing documents, can occur. See: "Scam Alert: Bad Deeds" by Sid Kirchheimer, published in the AARP Bulletin (Dec., 2008), as reposted online by the Montgomery County Recorder of Deeds Office.

Retransfer of The Empire State Building, in New York City, took only ninety minutes, as reported by The New York Daily News in "It took 90 minutes for Daily News to 'steal' the Empire State Building" (12/02/08) by William Sherman.

In one of the biggest heists in American history, the Daily News "stole" the $2 billion Empire State Building.

And it wasn't that hard.

The News swiped the 102-story Art Deco skyscraper by drawing up a batch of bogus documents, making a fake notary stamp and filing paperwork with the city to transfer the deed to the property. * * *

The massive ripoff illustrates a gaping loophole in the city's system for recording deeds, mortgages and other transactions.

The loophole: The system -- run by the office of the city register -- doesn't require clerks to verify the information. * * *

"Crooks go where the money is. That's why Willie Sutton robbed banks, and this is the new bank robbery," said Brooklyn Assistant District Attorney Richard Farrell, who is prosecuting several deed fraud cases. * * *

One Pennsylvania city, Philadelphia, experienced so many land fraud cases, its Council and Mayor acted to curb abuse. According to "Philadelphia City Council Amends Deed Recording Standards " (08/08/08) posted by the PA Notary Blog, hosted by the Pennsylvania Association of Notaries, "as of April 2008, Philadelphia had received 454 reports of suspected land fraud since 2000."

Philadelphia City Council unanimously passed a bill that amends Title 2 of the Philadelphia Code.

The amendment adds a new chapter providing that prior to the recording of any deed, a check of record ownership must be conducted by the Department of Records.

Appropriate documentation must be submitted to the Department with certain deeds for the delivery of deeds to the Department of Records must meet certain requirements. Finally, the record owner must be notified prior to the recording of any deed. * * *

Mayor Michael Nutter signed the bill on Aug. 14, and the ordinance will go into effect on Nov. 3 [, 2008]. * * *

See also: "Philadelphia Changes Deed Recording Requirements" (11/04/08) posted on the notaries' blog.

PA's new Act was noted by The Home Equity Theft Reporter in a posting on December 28, 2008, entitled "New Pennsylvania Law To Make It Tougher For Deed Theft Scammers To Heist Homes."

For consumers or fiduciaries, however, the new law should be transparent in effect, according to The Intelligencer's article:

Homeowners shouldn't worry about the new changes, said Bucks County Recorder of Deeds Edward R. Gudknecht.

“Most of the time your title companies and the attorneys that deal in real estate will make sure this is followed through,” he said.