Business - Deed fraud & property title scams

Deed fraud — sometimes called title theft or property deed scams — is one of the fastest-growing real estate crimes in the United States. These scams involve criminals forging signatures, impersonating property owners, and filing fraudulent deeds with county recorder offices. For businesses that own commercial property, the consequences can be devastating: loss of ownership, legal battles, financial damage, and operational disruption.

While these scams can happen anywhere, they have become especially common in states like California, where the recording system is open and county offices must accept nearly any document that meets basic formatting requirements.

How Deed Fraud Works

Scammers typically begin by identifying high-value commercial properties, vacant buildings, rental units, or properties owned by out-of-state or absentee owners. They then:

1. Forge the owner’s signature using publicly available records.
2. Notarize the fraudulent deed — sometimes using complicit or fake notaries.
3. Record the forged deed with the county recorder’s office.
4. Once the fraudulent deed is on record, transfer or “sell” the property to an accomplice.
5. Take out loans or lines of credit using the property as collateral.

By the time the legitimate owner becomes aware of the fraud, the property may have already been sold, mortgaged, or tied up in complex legal disputes.

Why Businesses and Commercial Property Owners Are Prime Targets

Criminals focus on commercial properties because they are often:

• High value — making them lucrative targets.
• Vacant during renovations or seasonal closures, reducing the chances of early detection.
• Owned by LLCs or corporations where mail goes to registered agents rather than site locations.
• Difficult to monitor regularly when owners operate multiple properties.

In open-recording states such as California, county recorder offices must accept any document that meets basic requirements. They do not verify:

• Ownership
• Intent
• Authenticity of signatures
• Whether the signer actually authorized the transfer

This gap creates a perfect opportunity for criminals to file fake deeds without resistance.

Common Warning Signs of Deed Fraud

Business owners should be alert to the following red flags:

• You stop receiving property tax bills or official notices.
• Unexpected liens, loans, or mortgages appear on your property.
• You receive foreclosure or eviction notices for loans you never authorized.
• A title search shows unfamiliar individuals or entities listed as owners.
• Mail from the recorder’s office arrives addressed to someone else.
• You discover utilities or services have been switched or transferred.

Legal Protections and What the Law Says

In California and many other states, filing a forged or fraudulent deed is a felony. Under California Penal Code §115, knowingly filing a false document with a public office can lead to:

• Up to 3 years in state prison
• Fines up to $10,000
• Restitution to the victim

Victims may also pursue civil remedies such as a quiet title action, which legally restores ownership to the rightful title holder.

How to Protect Your Business from Deed Fraud

Preventing deed scams requires regular monitoring, good record-keeping, and awareness. Here are the most effective steps business owners can take:

Enroll in County Recording Alert Programs

Many counties — including Los Angeles, Riverside, Orange, Fresno, San Diego, and others — offer free property fraud alert services.

These programs notify you whenever a document is recorded against your property, allowing early detection of fraudulent deeds.

Monitor Public Records Regularly

• Perform periodic title searches with your county recorder’s website.
• Use third-party title monitoring services.
• Confirm ownership status at least twice per year.

Use Title Insurance

Not all title insurance covers fraud — review your policy’s protections and consider adding coverage that includes forged deeds or fraudulent transfers.

Secure Vacant or Idle Properties

• Keep signage, lighting, and activity visible.
• Install cameras or remote monitoring systems.
• Ensure someone physically checks the property regularly.

Verify All Real Estate Transactions

Always use licensed title companies, escrow offices, and verified notaries. Never bypass official channels — even for small transfers between business partners.

Protect Your Business Records

• Secure corporate documents that include ownership details.
• Keep your mailing address up to date with county agencies.
• Ensure only authorized personnel can access property deeds.

Be Cautious with Power of Attorney

Scammers sometimes exploit Power of Attorney documents to impersonate owners. Grant POA authority only when absolutely necessary and limit its scope.

What to Do If You Suspect Deed Fraud

If you notice suspicious activity or believe your commercial property has been targeted:

1. Act immediately. Delays make recovery harder.
2. Contact local law enforcement or your county sheriff.
3. Notify your county recorder’s office.
4. Report the fraud to your District Attorney’s Real Estate Fraud Unit.
5. File a complaint with the California Department of Real Estate (or your state’s equivalent).
6. Consult a real estate attorney about filing a quiet title action.
7. Alert your title insurance provider — some policies may assist with legal costs.

How Businesses Can Stay Ahead of These Scams

Deed fraud is preventable with strong oversight and awareness. To stay ahead:

• Monitor all owned properties regularly.
• Maintain accurate mailing and ownership information.
• Educate employees about real estate and document fraud risks.
• Join local fraud awareness groups or industry associations.

Final Thoughts

Commercial property deed scams are more common than most business owners realize. Criminals take advantage of public records systems, vacant buildings, and high-value assets — often without detection until it's too late.

By monitoring your property, securing your records, and using official transaction channels, you can significantly reduce the risk of deed fraud and protect your business from costly legal battles and financial loss.

Staying vigilant is the key. Early detection can stop a fraudulent deed before the scammer can steal your property or equity.