How title theft works and the legal action to take if it happens

Attorney Tom Olsen: Chrissy, I want to talk in some detail about title theft. Because we know we have a lot of people calling us because there are commercials on TV trying to sell title theft insurance. Of course, these commercials on TV are going to paint the very worst picture, even if it's unrealistic for the most part, and people have been asking us about it, so we want to tell people where they should and where they don't need to be concerned.

Attorney Chris Merrill: Exactly.

Attorney Tom Olsen: First of all, whatever county you live in, there's a county comptroller. Orange County Comptroller that is in charge of recording deeds. Orange County now has on their site, you can sign up so that if anybody records any deed that affects your piece of property, Orange County is going to send you a notice. That's not every county in every state. I know it's in Orange County. Whether you're in Volusia County, Seminole County, Osceola County, I'm not quite sure, but it's definitely going to be done through your comptroller website.

Volusia County comptroller, Osceola County comptroller. First of all, check that. Then, next, you do not need to worry about title theft for your home because when title theft occurs, if your property is going to be conveyed to somebody, you're going to see survey stakes, inspectors, appraisers, you're going to know something's going on if you're living in your home. They're not going to do title theft on your home. Where are people or crooks doing title theft? They are doing it on vacant lots. If you have a vacant lot that's next door, probably still no need to be concerned. If you have a vacant lot that's on the other side of town or another city or another state, that's where you need to be concerned against title theft and either potentially getting titled theft insurance, or signing up on that comptroller's website to get notice if anybody signs a deed or records a deed affecting that vacant lot.

Attorney Chris Merrill: Great point. I think Tom, am I correct, then what you're saying is, is certainly, if you're in that situation where you do have vacant land that you do not happen to drive by very often, either because, one, it's in a different town or in a different state or you're just too busy, even if it's in the same location, but you don't get by there. Step one, check with that county comptroller's and see if they are now offering this new service. That new service, again, like you said, it's by county and of course, I'm sure more and more counties are going to come on board but right now what we don't know is, because it's by county, we don't know exactly which ones are offering it. Step one. If you call and they do not have that service, then am I correct, Tom? That would be a reason to consider doing that insurance possibly.

Attorney Tom Olsen: It'd be worth it. I think that the other thing that people should be aware of is that there are title insurance underwriters out there. There's a few big ones in the country like First American, okay? We have a title company here Edgewater Title Company, we write title insurance through First American. Title insurance underwriters, like First American, they are quickly getting up to speed with the scam or the theft of title of vacant lots so that when title agents are now closing, the purchase and sales of vacant lots are being doubly aware of what's going on. We got that going on for us.

Title Company underwriters are getting up to speed with this title theft that's going on for vacant lots, but with that said, we're a relatively small law firm here in Orlando. Even as a relatively small law firm here in Orlando, we have now got two title theft cases of vacant lots right here in Orlando. One of them we've come to basically a conclusion, we've settled it for our client, and the other one is now just getting started.

Attorney Chris Merrill: Exactly.

Attorney Tom Olsen: You were in on that case. When we're referring to these people, Chrissy, let's call them "real owner" and call them "fake owner." What happens when this title theft occurs? Well, what happens is that it's in the name of real owner, somebody signs a deed signing real owner's name. They've got people that are complicit in this because that deed needs to be witnessed and notarized so they got some other crooked people working with them. They do this crooked deed, they record it in the public records.

Now, it's owned by fake owner number one. Fake owner number one quickly conveys it to fake owner number two. Fake owner two quickly sells it to a fake owner number three, but fake owner number three may or may not be aware that this is a theft of title. They don't really know. They're getting title insurance. Everything seems to be good. We did this case that has now been settled on that, we were on fake owner number three and we don't really know. We filed a lawsuit, but we don't really know whether fake owner number three was in on it or not in on it.

Attorney Chris Merrill: Exactly. We don't know and we will probably never know, in that situation. Why? Because, two, exactly like you said, Tom fake owner number three, paid fair market value for the property and it went through a title company, you're absolutely correct. Those two, again, they paid, and it went through title company. They may or may not be aware, let's assume they're not aware, they are an innocent purchaser in this situation, but at the end of the day, because we were able to prove all the appropriate things, what it comes down to is that that deed ends up being void and in that situation, we got the property back to the rightful owner, real owner.

Real owner, of course, was very happy. However, again, real owner still had to pay money to make this happen and for us to really proceed with this lawsuit and follow it all the way through. However, of course, they got their property back. It is a sad thing when it happens to anybody, but people do have to realize, unfortunately, there's a cost to it because this is one of those areas of law, bodies of law, that there's not automatic attorneys fees included.

Attorney Tom Olsen: We represented real owner, we filed a lawsuit against fake owner number three in the chain of title. Number three, yes?

Attorney Chris Merrill: No, all.

Attorney Tom Olsen: All three of them. Okay.

Attorney Chris Merrill: We filed one, two, and three.

Attorney Tom Olsen: Okay, so they were all defendants. Then fake owner number three got a real title insurance policy. Fake owner number three is the one that now turns his claim over to the title insurance company who's on the hook.

Attorney Chris Merrill: Exactly.

Attorney Tom Olsen: Title insurance company, they wanted to pay our client the cash value of that vacant lot. They can't jam that down our throats, no way.

Attorney Chris Merrill: Correct.

Attorney Tom Olsen: Our real owner, our client wanted that piece of property back and we were not going to settle for anything else.

Attorney Chris Merrill: Exactly, but you're right, they were trying to jam down that, "Oh, we'll just pay for it." That was not acceptable to our client and we stood firm on that and the end result was real client got property back.

Attorney Tom Olsen: Client got property back but nothing about that process entitled our client to attorney fees. Client was still out of pocket, still suffered a financial loss, but got their property back.

Attorney Chris Merrill: Correct. Now, we were successful with getting some attorneys fees back because, again, real property owner was not entitled, based upon this area of law. However, we did successfully receive some, so at least some back.

Attorney Tom Olsen: Client got the piece of property back and title insurance company at the end of the day took a loss on it. That's what title insurance is for, they're insurance company and they write a lot of policies and a lot of policies never have a claim, but some policies, in this case, they took a loss.

Attorney Chris Merrill: They had a claim.

Attorney Tom Olsen: Whether that title insurance company went after fake owner one or fake owner two or could even find them. We don't know.

Attorney Chris Merrill: We don't know, and you're right, Tom, I know you mentioned a minute ago so that the listeners are aware. First American who are Edgewater Title Company writes through, they have already initiated these safeguards and criteria, as you were mentioning earlier, good for First American that they are already doing that and that's as recently as the last six months. However, maybe not every title company is on board with that yet.

We know that several are but not every title company. I'm sure that all title companies will come on board with it, but they may not be there yet, which is why these fake owners are able to get these through.

Attorney Tom Olsen: Yes. Folks, what we're talking about is title theft and what we're saying is that if it's your home you're living in, don't be concerned about it, where you need to be concerned about title theft is if you own a vacant lot in the other side of town or another city, another county, another state that's where the title theft is happening.

The best way to prevent that is go to the county comptroller's website. Not every county comptroller has it, but Orange County comptroller has it and you can register to be notified if anybody files a deed that affects the title of your piece of property. Then, of course, you would immediately put something in the public records that says "No way, man. This is a fake deed" to stop that process from happening.

Otherwise, if the comptroller doesn't have it in whatever county you happen to be in, that could be a worthwhile investment to have title insurance on that vacant piece of land in a distant city, county, or state.

Attorney Chris Merrill: Exactly. Thank you, Tom. Thank you for the information because we want to make listeners aware as up to date information that is brought to our attention, and what we know is we are being contacted more and more by listeners wanting to know. "Hey, Tom. Should I get this title insurance for my home or my property?"

What you're trying to let people know is if it's the home you live in, you do not have to be concerned, but if you do own vacant property, especially if it's not near you or next door, then it would be wise to consider looking at that, checking out comptrollers or one of these other options.

Attorney Tom Olsen: We had somebody call and clearly they're reciting a commercial that they are seeing on TV for title theft insurance. In this commercial, a little old lady has owned her home forever and the next thing you know title theft has happened and they are evicting her out of her house, kicking her out of her house. I say BS.

There is no way, ever, ever, ever that that's going to happen. I dare them to prove that to me that that's ever happened. There is no way that their mom's going to-- Who's going to take the loss there?

If somebody with clean hands, who really thought they were buying an old lady's piece of property, they would have gone to a title insurance company, and once again the person with clean hands is going to go to the title insurance company. The title insurance company is going to pay their loss, but the little old lady is going to keep her house guaranteed.

Attorney Chris Merrill: Exactly. What you're saying, Tom, too, is that the commercial is portraying the little old lady in that scenario. That scenario is what is very unlikely, if not impossible, but there are other scenarios that it could be which is why we're educating people.