Lawmakers advance bill to protect Texans from real estate fraudsters

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Six years ago, the First Christian Church in Lancaster was a victim of deed fraud, church board chair Robert Brown told Texas lawmakers on Friday.

“It was an absolute nightmare. An absolute shock to get letters from the Dallas County appraisal district asking us what we sold our property for. Because we did not sell it,” Brown said.

It took the church two years to get the property back into their name, and another three to see the fraudster convicted of the crime. It was a long process that involved two lawyers, Lancaster police and the Dallas County Clerk's office, Brown said.

Brown shared his experience with the Texas Senate business and commerce committee as part of a Friday hearing on legislation to prevent and combat deed fraud. After listening to testimony, lawmakers voted unanimously to advance Senate Bill 15, which would strengthen protections and create new criminal penalties.

The legislation now goes to the full Senate for a vote in the floor’s chamber.

Deed fraud, one of the lesser-known items on this year’s jam-packed special legislative session, is a form of real estate fraud in which scammers file fraudulent deeds and use them to sell someone else’s property. In other cases, fraudsters take out loans against the stolen deed.

Brown said the legislation is needed to protect people.

“People can just walk into the county clerk’s office and give them this paperwork, that everything on it is fraudulent. Everything,” Brown said. “They just waltz in and nobody asks them any questions. Nobody asks for identification.”

SB 15, filed by state Sen. Royce West, D-Dallas, would make it mandatory for county clerks to request identification when a property transaction is filed.

The bill “tells us exactly word for word what you do, what you can do, because right now we can't demand to see their license. We may in some counties,” Victoria County Clerk Heidi Easley testified Friday.

In Dallas County, which West represents, more than 100 properties have been involved in deed fraud this year, Assistant District Attorney Phillip Clark said. In April, Harris County attorney Christian Menefee filed a lawsuit against a Houston couple who created fake deeds and ownership records for at least 35 properties.

“It's a surprisingly big issue,” Clark said. “In the scope of all the land and houses and properties in the state of Texas, it's a small number. But it is a growing number and it's particularly devastating to the victims.”

It’s unclear exactly how widespread the problem is in the state since there is no criminal code for deed fraud. During Friday’s hearing, lawmakers agreed to merge SB 15 with Senate Bill 36, which would create new criminal offenses and penalties for real property theft and expand the statute of limitations for prosecution to 10 years.

Last month, Gov. Greg Abbott vetoed Senate Bill 648, a previous version of deed fraud legislation that passed during this year's regular lawmaking session.

In his veto, Abbott said SB 648 would have been particularly burdensome for low-income landowners. The bill would have required the presence of an attorney, a title agent or a similar service provider to file documents related to any real property transaction. It would have also required property owners without any legal representation to jump through additional hoops and name every heir to the property in an affidavit.

Abbott added deed fraud to his agenda for the special session so lawmakers could fix the legislation.

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