Housing Counsel: Addressing concerns about fraudulent property deed transfers

By Benny L. Kass
Saturday, April 24, 2010

Q: My father is in his 90s and in frail health. He owns a house in the District, free and clear of any debt, and my cousin just told me that she now owns it. I am concerned that my cousin forged my dad's name on the deed. My father has always assured me that I would inherit the house, and he does not remember signing any documents. What should I do?

A: There are several steps that you must immediately take. You should get a copy of the deed that transferred the house to your cousin. You can get this from the District's Office of the Recorder of Deeds or online at http://www.washington.dc.us.landata.com.

You also should try to get your father to sign an affidavit that he did not deed the house over to your cousin. This may not be easy, depending on his mental and physical condition, but you need to create a record while he is alive.

To register a deed on land records -- anywhere in the Washington area -- the person giving the deed (called the grantor) must have his or her signature notarized. Locate the notary whose name appears on the deed. You should be able to get information about the notary from the District's Office of Notary Commissions and Authentications, http://www.os.dc.gov. If the deed was notarized in Maryland, you can find the notary through the Office of the Secretary of State, http://www.sos.state.md.us. In Virginia, you can locate the notary through the Office of the Executive Secretary, http://www.commonwealth.virginia.gov.

Contact the notary and ask for proof that the deed was properly notarized. A notary is legally obligated to be present when the person is signing a document and to keep accurate records reflecting every document that was notarized.

You should also discuss the situation with your father's medical team to determine whether he was mentally and physically competent to sign the deed on the date reflected on the document.

I recommend that you hire a lawyer to assist you in all this. Understand that the burden of proof to show that the deed was not signed by your father falls on you. Although you may believe that the deed was forged, it is possible that your father changed his mind and decided to give the house to your cousin. Such actions are quite common in families; a parent gets mad at his child and decides to cut him or her off from any inheritance.

You should also obtain a title search to determine whether your cousin borrowed money using the house as security. In other words, is there now a mortgage (deed of trust) on land records? If so, this can become a difficult legal issue, because the mortgage lender will claim that the transaction was legal and that the money is owed.

A recent D.C. Court of Appeals case that involved a claim of forgery is helpful in explaining this area of law. Willie Smith allegedly gave daughter Mary a power of attorney. Mary, asserting this power, conveyed to herself property owned by her father. He died one day later. Mary then borrowed money and gave a mortgage lender a deed of trust secured on that property. When Mary defaulted on her loan, the lender, now Wells Fargo, foreclosed and ended up owning the house.

Daral Smith, Mary's brother, filed suit against her and Wells Fargo, asking the court to set aside the foreclosure on the grounds that the power of attorney did not specifically authorize Mary to convey the property to herself and that the document was a forgery. This is called a "quiet title" suit, in which Daral claimed he should have an interest in the property.

Wells Fargo said that it was a bona fide purchaser (BFP) and that the deed of trust was valid. The legal definition of a BFP is a person who, in good faith and for "valuable consideration," has no knowledge or notice of any circumstances regarding the transaction that would require further inquiry into the situation.

The court analyzed the case in two ways. If the power of attorney was forged, the deed and the deed of trust would be void. The law of forgery throughout this country is that a forged document is invalid, void from its inception.

Determining whether a document has been forged is not a legal issue; the court will decide based on all the facts. Often, doctors have to testify whether the person who signed the document was physically and mentally competent on the date the document was signed. Often, handwriting experts will be called in to testify whether the signature was valid.

Because the trial court did not allow Daral to present affidavits in support of his forgery accusation, the court sent the case back to the lower court.

But the court did not stop there. It also analyzed the question of whether Wells Fargo was a BFP. If the lender knew -- or should have known -- of the facts involving the power of attorney, then Wells Fargo would not be a BFP, the deed of trust would be void and the foreclosure would be set aside. After a lengthy discussion, the court determined that Wells Fargo was protected as a bona fide purchaser, subject, of course, to whether in the final analysis the power of attorney was not a forged document.

If it is determined that your cousin forged the deed, there are also criminal charges that the government can bring should you wish to pursue that route. Although different states may have different requirements, the major elements necessary to constitute the offense of forgery generally are a false writing or alteration of a document and the intent to defraud another person.

Benny L. Kass is a Washington lawyer. This column is not legal advice and should not be acted upon without obtaining your own legal counsel. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite 1100, Washington, D.C. 20036.

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