According to a recent Gothamist article, it was estimated that around $400 million in homes across New York City are at potential risk of deed theft. This vulnerability is the result of ongoing ownership disputes that make it easier for opportunists to potentially take control of different properties. These issues point to the importance of effective estate planning, as well as ensuring you have experienced legal representation to prevent this from happening to you or someone you love.
$400 Million in Properties At Risk of Deed Theft in NYC
Based on an analysis from the Center for N.Y.C. Neighborhoods, around 350 properties every year across N.Y.C. are at risk of being stolen in “partition” lawsuits. In many of these “partition” actions, investors purchase a co-owner’s share in a property and force a sale of the other co-owners’ interests. These properties are valued at an average of $1.1 million each, adding up to around $400 million in total value based on these lawsuits. However, this is likely an undercount, as it only includes properties where there are ongoing legal disputes, and not those at risk of being stolen through other means such as filing fraudulent documents to obtain ownership.
The Dangers of Deed Theft
“Deed theft” broadly refers to a variety of different tactics used to take possession of someone else’s property through fraudulent or coercive means. This may include things like forged documents, predatory real estate loans, or using hidden terms in foreclosure documents and other legal agreements to take control of a property. In many cases, victims may have no idea they’ve just signed over the deed to their own home until it is too late.
Vulnerability Emerges From Legal Disputes
The Center for N.Y.C. Neighborhoods analysis is based on an examination of “partition” lawsuits, which occur when two or more people who share ownership of a property are forced to sell the property in a court action. In such cases, they may ask to have the property partitioned, meaning that the property is either physically divided up, or sold off and the proceeds divided among the property’s owners. Often, these lawsuits arise after someone dies and leaves their property to multiple heirs and investors or surviving relatives force a sale through a partition action. Deed theft can also happen to seniors, disabled people or to individuals with dementia.
However, these sorts of property disputes make property owners vulnerable to the loss of the property, especially in cases where there are many owners. A company or investor can purchase a single owner’s share in the property and attempt to force a sale, often resulting in the actual owners losing a property they wanted to keep, or getting far less money than they might otherwise have received.
Protecting Yourself From Deed Theft
While there is no guaranteed way to completely protect yourself from the risk of deed theft, there are steps you can take to minimize the risk. Careful estate planning can limit the risk of a property being partitioned, and minimize the risk of legal disputes during or after a person dies leaving real estate. If you believe that someone has engaged in deed theft or fraud, you should also make sure to have an experienced lawyer who can represent you in your deed theft claim.
If you or a loved one are dealing with legal issues related to real estate law, or you are dealing with any other issue related to elder law, you will need specialized legal advice. The attorneys at Hobson-Williams, P.C. are skilled in all aspects of real estate law, and are dedicated to representing clients with diligence and compassion. To speak to an attorney or to schedule a consultation, call 866-825-1LAW.
