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Happy April and Spring to all! We have made it through another New England winter. The April showers will eventually bring us May flowers.
For the month of April, Tax Scams are on the rise across the US. Locally, a more sinister scam is on the rise, leaving hundreds of folks devastated financially in its wake. The FBI has issued a warning urging property owners and Real estate agents of Quit Claim Deed fraud (home theft) to avoid losing their property right from under them.
What is Quit Claim Deed?
Known also as quit claim covenant, Quit Claim Deeds are a document used to legally transfer property and buildings from one party to another. This process is similar to a seller/buyer having a special warranty deed in other states.
In the state of Massachusetts, there are three types of deeds for property owners.
For further understanding of these systems in MA, a Warranty Deed assures the guarantee of owning and having the legal rights to transfer their property. This type of deed offers the highest amount of protection and assurance.
A Release Deed has the least amount of assurance. It is simply to transfer the rights in the property but provides no protection for the title in name.
A Quit Claim Deed is set in between a warranty and release deed in the sense of protection and liability. The grander uses a Quit Claim covenant as a purchase agreement in transferring the property by terminating their claims or rights on the property. They also do not cover any preexisting burdens from the property and guarantee that the grantor will defend any legal claims to the title under their name. This means that there is no warranty provided for the title before the property is sold, and lingering interests will be attached to the property that the grantor is not liable for.
In the event that there is an issue with the home, it is important to have the buyer or seller properly draft a Quit Claim deed to protect your interests. In the events it is not properly drafted, they run the risk of accidentally obtaining the wrong property Lot or having the incorrect amount of property than what you intended on purchasing.
Knowledge FBI Has on These Fraudulent Events
According to the FBI, land theft isn’t just isolated to Massachusetts alone but has now also become a rising problem nationally. At this time, the FBI are locating solutions to support those that have been affected by these fraudulent events. According to data in the Boston Division, Massachusetts alone has reported 1,576 victims lost $46,269,818 to Quit Claim deed fraud. These numbers are likely even higher than reported due to the fact many may not know where to report or realize they have been scammed.
Another factor to consider; due to Covid19, the landscape for business interactions are more accustomed to phone or email. Leaving this as a perfect scenario for fraudsters to target vulnerable assets.
The FBI particularly notices these thieves appear to be targeting one group more than the other. The elderly age demographic are more vulnerable to these events than younger generations. This is due to some older folks owning vacant land or homes with no mortgages attached.
Fraudsters are able to cheat the system by forging documents, creating phony transfers of property ownership. These allow them to sell vacant land, take out a mortgage, and rent to make a profit. All while the original owners rush to court to reclaim their property. Blindsided homeowners caught in this crossfire are affected emotionally, financially, housing instability, and feelings of shame/embarrassment.
What is Being Done to Help The Public?
The increased activity of fraud has caught the attention of the FBI, urging the public to take all precautionary steps to protect yourself and your property. They have identified the following fraudulent scenarios:
-Scammers snooping through public records to find personal information, vacant properties and impersonating the landowner. Once they obtain the vacant public records, they begin to ask real estate agents to list the property. For property owners, the scariest factor through these fraudulent cases is they do not know this occurred until after the sale proceeds on the house.
-Older age demographics are far vulnerable since relatives and even close associates persuade them into signing paperwork to transfer the property into their name for the benefit of financial gain.
-Another term used for fraudsters in this scenario is ‘title pirates’ using forged documents to convey title to a property. These can go undetected after the money has been wired to a transfer.
If you or someone you know has been affected by these types of fraudulent scenarios, try to report theft as soon as possible. The most ideal timing to report is within a 24-72 hour window. This will allow room to freeze account transfers and retrieve stolen money.
We urge folks to report fraud and suspected fraud to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
Ways Landowners & Realtors Should Protect Themselves
For Landowners, they can set up online search alerts for your property and monitor online property records for any unusual activity. Depending on the distance, landowners should drive by the property and or hire management companies to check its systems. Unusual activity can appear in instances such as a halting stop in receiving water or property tax bills. In the case of a property being vacant, landowners should report any increase in sudden utility bills and ask the neighbors to keep a lookout for anything suspicious.
Email and phone applications are the most preferred way for most to communicate. It is important to take caution whenever receiving encrypted applications for real estate transactions.
For Realtors, it’s important to have the essential paperwork. This includes copies of documents of their most recent tax bill, utility bill, and person’s ID. Ideally, ask for in-person identity checks and avoid remote closings. To be more on the cautious side, call the public notary to confirm the documents presented are under their name, looking up their phone number to avoid any potential impersonation. Once the individual has provided the paperwork, send a certified letter to the address of record on the tax bill.
Cybercrime is now the largest form of organized crime, and we strongly encourage anyone who falls victim to report it. You shouldn’t have to deal with the threat of scams alone. At Ekaru, our goal is to support the community by raising awareness about the various scams that exist. While electronic transactions offer many conveniences, they also come with risks, making it essential for everyone to stay vigilant for unusual activity. The more informed you are, the safer you'll be online.
To help, Ekaru offers cybersecurity awareness training, an excellent resource for you and your team to stay updated on the latest threats and ensure that everyone in your organization is equipped with the knowledge to stay protected.
Want to learn more about the cybersecurity training we provide for individuals and businesses like yourself? Our team helps businesses like yours create and implement security plans that match your specific needs and budget. Contact us today for a no-cost consultation and see how cybersecurity awareness training will strengthen your company's future.