Establishes a private right of action for deed theft; provides that victims of deed theft may maintain an action against a deed thief or a bank that provides a loan that assists in the commission of deed theft; authorizes victims of deed theft to recover actual damages, treble damages and attorneys' fees; defines terms.
STATE OF NEW YORK
________________________________________________________________________
7721--A
Cal. No. 1018
2025-2026 Regular Sessions
IN SENATE
May 1, 2025
___________
Introduced by Sens. BRISPORT, BASKIN, CLEARE, COMRIE, GONZALEZ, HARCK-
HAM, LIU, MYRIE, SALAZAR, SANDERS -- read twice and ordered printed,
and when printed to be committed to the Committee on Judiciary --
recommitted to the Committee on Judiciary in accordance with Senate
Rule 6, sec. 8 -- reported favorably from said committee, ordered to
first and second report, amended on second report, ordered to a third
reading, and to be reprinted as amended, retaining its place in the
order of third reading
AN ACT to amend the real property actions and proceedings law, in
relation to establishing a right of action for deed theft
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "deed theft: private right of action act".
3 § 2. The real property actions and proceedings law is amended by
4 adding a new section 891 to read as follows:
5 § 891. Action for deed theft. 1. Definitions. For the purposes of this
6 section, the following terms shall have the following meanings:
7 (a) "Lender" means any trust company, private banker, savings bank,
8 safe deposit company, licensed lender, savings and loan association,
9 credit union, investment company, or mutual trust company, as such terms
10 are defined in section two of the banking law, that provides a loan that
11 encumbers covered property or was collateralized by covered property.
12 (b) "Covered property" means residential real property, including but
13 not limited to, one-to-six family dwellings, condominium units, cooper-
14 ative apartments, lots in manufactured home parks, and securities that
15 entitle the holder thereof to possession or occupancy of such property.
16 (c) "Deed theft" means the act of taking, transferring or encumbering
17 title to covered property without the owner's approval or knowledge, or
18 through unfair, deceptive or abusive acts or practices. Deed theft
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10740-04-6
S. 7721--A 2
1 includes, but is not limited to actions taken by a natural person or
2 entity whereby such person or entity:
3 (i) alters, falsifies, forges, or misrepresents any written instrument
4 involved in the conveyance or financing of covered property, such as a
5 residential or commercial deed or title, with the effect of deceiving,
6 defrauding, or unlawfully transferring or encumbering the ownership
7 rights or a portion thereof of covered property;
8 (ii) misrepresents themselves as the owner or authorized represen-
9 tative of covered property to induce others to rely on such false infor-
10 mation in order to obtain financing;
11 (iii) takes, obtains, or transfers title or ownership of covered prop-
12 erty by fraud, misrepresentation, forgery, larceny, false pretenses,
13 false promise, or any other fraudulent or deceptive practice; or
14 (iv) fails to disclose materially relevant information in order to
15 induce an unfair transfer or encumbrance of the ownership rights of
16 covered property.
17 (d) "Deed thief" means any person or entity that commits deed theft.
18 (e) "High-value experienced commercial transaction" means a trans-
19 action the value of which exceeds six million dollars where all parties
20 to the transaction are licensed realtors, lawyers, and/or have purchas-
21 ing, selling, renting, and/or encumbering real property as their primary
22 source of income.
23 2. Private right of action for victims of deed theft. (a) A person or
24 entity that is a victim of deed theft, as defined in this section, may
25 maintain a private right of action against any deed thief, as defined in
26 this section, who has committed deed theft against the covered property
27 of such person or entity.
28 (b) A person or entity that is a victim of deed theft, as defined in
29 this section, may maintain an action against a lender that is not a bona
30 fide encumbrancer if such lender:
31 (i) provides a loan to a deed thief and such loan materially assists
32 the deed thief in the commission of the deed theft; and
33 (ii) fails to conduct reasonable due diligence or complete a standard
34 non-negligent investigation regarding the covered property that is
35 subject to the claim of deed theft.
36 (c) A person or entity that is a victim of deed theft, as defined in
37 this section, may maintain an action against a title insurance corpo-
38 ration that has negligently facilitated such deed theft if such title
39 insurance corporation:
40 (i) provides title insurance coverage to a lender that provides a loan
41 to a deed thief and such title insurance coverage assists in the commis-
42 sion of the deed theft; and
43 (ii) fails to conduct reasonable due diligence or complete a standard
44 non-negligent investigation of the title ownership of the covered prop-
45 erty that is subject to the claim of deed theft.
46 3. High-value experienced commercial transactions. No private cause of
47 action for deed theft shall be available for high-value experienced
48 commercial transactions.
49 4. Remedies and limitations. (a) Any deed or mortgage obtained by deed
50 theft shall be deemed void ab initio.
51 (b) Any person or entity found by a preponderance of the evidence to
52 have violated this section shall be liable to the deed theft victim for
53 the following: (i) actual damages, including consequential and inci-
54 dental damages, (ii) treble damages, and (iii) reasonable attorneys'
55 fees.
S. 7721--A 3
1 (c) With respect to a bona fide purchaser or encumbrancer for value,
2 any right to equitable subrogation shall be limited to an amount not to
3 exceed the amount that such bona fide purchaser or encumbrancer for
4 value paid to satisfy any liens encumbering the covered property before
5 the deed theft. This lien shall not accrue interest, shall not provide
6 for a right to foreclose on the covered property, and shall become due
7 upon the sale of the subject covered property.
8 (d) The remedies provided in this section are not intended to be the
9 exclusive remedies available to a victim of deed theft, and a deed theft
10 victim may be granted injunctive, declaratory and such other equitable
11 relief as the court deems appropriate in an action to enforce compliance
12 with this section.
13 (e) A private action for damages against the lender or deed thief
14 pursuant to this section shall be commenced within six years of discov-
15 ery of the deed theft.
16 (f) In any action by an assignee to enforce a loan against a deed
17 theft victim, a deed theft victim may assert any claims in recoupment
18 and defenses to payment under the provisions of this section and with
19 respect to the loan, without time limitations, that the deed theft
20 victim could assert against the original lender.
21 § 3. This act shall take effect on the ninetieth day after it shall
22 have become a law. Effective immediately, the addition, amendment and/or
23 repeal of any rule or regulation necessary for the implementation of
24 this act on its effective date are authorized to be made and completed
25 on or before such effective date.
