Fraudulent Conveyances: What Are They and How Do They Happen?

Real Estate Law

Real estate transactions involve a significant amount of paperwork. Even a simple real estate purchase and sale transaction requires both the seller and the buyer to prove their identity, sign a number of papers, and have their signatures notarized. The purpose of all this is to ensure the validity of the transfer and provide a clear chain of title to the property.

Yet, despite all precautions and long-established procedures, fraudulent transfers still occur.

A Little About Fraudulent Conveyances.

There are, of course, many ways in which a fraudulent conveyance can occur.  Some of the most common include:

  • Fraudulent real estate investment schemes involving the sale of trust deeds
  • Forged escrow instructions to steal escrow deposits
  • Home purchases made by “straw” buyers
  • Forged grant deeds or other recorded documents.

Transfers of real property must be in writing. (See our blog on the Statute of Frauds.) A deed is the written instrument that transfers a property owner’s interest in the property to another. There are several types of deeds, such as:

  • Warranty deeds
  • Quitclaim deeds
  • Grant Deeds
  • Spousal Transfer deeds

When it comes to property transfers, a valid conveyance requires that a deed is properly executed by the grantor, and then delivered to (and accepted by) the grantee. Because actual delivery of a deed to the grantee isn’t always possible, most states allow constructive delivery of a deed. Recording an acknowledged deed at the County Recorder’s Office provides notice of the transfer and can constitute constructive delivery. Recording a deed is prima facie evidence of the transfer of ownership of the property.

Fraudulent conveyances occur when a criminal or con man (or woman) posing as the property owner, either steals the true property owner’s identity, or forges the true owner’s signature on a deed (usually a quitclaim deed), and then records the forged deed. Fraudsters typically manage to have the deed notarized by using false identification.

Once the deed is recorded, criminals frequently use the deed to take out a mortgage against the property. And once they get the money from the bank, they disappear— leaving the true homeowner facing foreclosure proceedings.

Unfortunately, fraudulent real estate conveyances—and scams involving recording fraudulent deeds in particular—are not uncommon. While forgery is a crime (a felony) in all fifty states, ultimately the responsibility for safeguarding your ownership interests in your home falls to you. If you have been the victim of a fraudulent transfer, seek legal advice immediately.

Protecting Your Real Property Rights.

At the Law Offices of Mark Weinstein, P.C., our clients benefit from our experience and expertise in all aspects of real estate. Since 2001 we have dedicated ourselves to protecting our client’s property rights. We have offices in Cumming, and we serve clients in Atlanta, Gainesville, Gwinnett County, Bartow County, Hall County, Henry County, Cherokee County, Clayton County, Cobb County, and other counties throughout Georgia. Call us at: 770-888-7707. Or you can e-mail us with inquiries at: lawofficesofmarkweinstein@gmail.com

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