Relates to the theft of real property; provides certain protections for victims of real property theft; authorizes a stay of foreclosure proceedings pending an investigation into theft or fraud.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6656
SPONSOR: Weinstein TITLE OF BILL:
An act to amend the real property actions and proceedings law, the real
property law, the criminal procedure law, and the civil practice law and
rules, in relation to the theft of real property and protections for
victims of real property theft
PURPOSE OF BILL:
The purpose of this bill is to increase protections against real proper-
ty theft by providing homeowners and prosecutors tools to assist in
restoring title to the rightful homeowners, extending certain consumer
protections to homeowners in distress, and preventing deed theft scam-
mers from utilizing the courts and the law to their advantage in carry-
ing out the fraud.
SUMMARY OF PROVISIONS OF BILL:
Section one of this bill would require courts to stay eviction
proceedings when a government agency is engaged in an investigation or
criminal/civil litigation concerning title to a property, or where a
party in housing court has a dispute about title.
Section two of this bill would provide that in related civil actions
that follow a criminal conviction for deed theft or a fraudulent trans-
action involving real property, the criminal conviction would create a
rebuttable presumption in the civil action that the deed transfer was
fraudulent, shifting the burden of proof from the original homeowner to
the convicted party to prove that they have legitimate title to the
property.
Section three of this bill would amend the Real Property Law to extend
the protections of the Home Equity Theft Prevention Act (HETPA) to home-
owners with utility liens.
Section four of this bill would modify the definition of "distressed
home loan" contained in § 265-b of the Real Property Law, related to
distressed property consulting contracts, so that it covers a home loan
for which an installment payment is more than sixty days past due.
Section five of this bill would establish a rebuttable presumption that
a buyer is not a good faith purchaser if the original owner's mortgage
is unpaid following the conveyance of the property and the buyer does
not formally assume the putative seller's loan.
Sections six and seven of this bill would amend the Civil Practice Law
and Rules (CPLR) to:
*include additional crimes that, if proven, would allow the Attorney
General or a District Attorney to petition a court to void title.
*authorize the Attorney General or a District Attorney to file a lis
pendens upon a property when there is probable cause that a deed theft
crime has occurred or upon the filing of a criminal complaint or indict-
ment for a real estate-related crime related to that property.
Section eight of this bill provides the effective date.
JUSTIFICATION:
Real property theft, often referred to as deed theft, is a surprisingly
frequent occurrence that is most common in gentrifying neighborhoods.
Deed theft perpetrators often target minority homeowners in gentrifying
neighborhoods because their property values have increased significant-
ly, and tend to single out those who are likely to be vulnerable to
fraudulent schemes - preying on seniors and those facing financial hard-
ship. Real property thieves target these individuals using a variety of
schemes to deprive them of their most valuable asset, including the use
of fraudulent signatures or making false promises of quick money to
deceive homeowners into signing away their ownership.
The current legal landscape makes it too easy for scammers to victimize
homeowners and too difficult for homeowners and prosecutors alike to
achieve justice after a real property theft has been perpetrated.
Victimized homeowners must navigate a series of complex legal steps,
often with limited financial resources, to keep or restore possession of
their homes, sometimes even facing eviction from their own homes after
being victimized In many cases, prosecutors do not learn of the crime
until many years after it occurred, creating significant challenges to
conduct an investigation before the termination of the statute of limi-
tations. Making these circumstances worse, scammers are currently able
to use tactics to quickly extract money from the property and prevent
the homeowner from regaining title by using the equity of the property
to secure bank loans, demanding rent from any existing tenants, and
eventually selling the property to an unsuspecting buyer,.creating a
legal impediment to the homeowner reacquiring the property.
The legislative proposals included in this bill aim to address many of
the shortcomings in the law that allow deed theft to occur and prevent
these cases from being resolved in a just manner. These solutions are
founded on the collective experiences of the Office of the Attorney
General and members of its Deed Theft Task Force, along with testimony
delivered by impacted parties and their legal representatives at various
legislative hearings. The Deed Theft Task Force, chaired by the OAG, is
comprised of District Attorneys' Offices within and outside of New York
City, the New York City Sheriff's Office, the New York City Department
of Finance, The Legal Aid Society and other law enforcement and civil
enforcement agencies.
LEGISLATIVE HISTORY:
New bill, 2023.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Undetermined.
EFFECTIVE DATE:
This bill would take effect 30 days following enactment.
