Real estate is one of the most valuable assets you can own—and also one of the most targeted by fraud. In California, where real estate markets are fast-paced and high-stakes, protecting your property from real estate fraud isn’t just smart—it’s essential.
Whether you’re a homeowner, investor, or trustee, understanding how to identify and prevent fraudulent activity is key to safeguarding your property and financial future.
Understanding Real Estate Fraud in California
Real estate fraud involves any illegal or deceptive practice related to property ownership or transactions. This can include forged signatures, fake listings, fraudulent deeds, or misrepresented mortgage applications.
In recent years, scams involving fake sellers, forged documents, and title fraud have increased—especially as remote transactions and elder financial abuse cases rise.
Why the Statute of Frauds in Real Estate Matters
In California, the statute of frauds requires most real estate agreements to be in writing to be enforceable. This legal principle plays a vital role in reducing the risk of real estate contract disputes.
Key safeguards like notary verification and recording property transfers at the county recorder’s office provide additional protection. These systems help confirm that parties are who they say they are and that the chain of title is legitimate.
The Role of the California Department of Real Estate (DRE)
The California Department of Real Estate (DRE) oversees licensing for real estate professionals and investigates misconduct. If you suspect a fraudulent deed or suspicious activity, the DRE works with the District Attorney’s office to pursue criminal enforcement.
They also issue warnings and resources for consumers, making the DRE a critical player in homeowner protection and fraud prevention.
Key Red Flags to Watch Out For
Real estate scams often start subtly. Recognizing red flags early can prevent big financial loss.
Be on the lookout for:
- Unusual delays in the escrow process: If timelines change without explanation especially close to closing it could be interference or manipulation.
- Unexpected changes to the property deed transfer: If someone wants to change the grantee name last minute or bypass your real estate agent that’s a red flag.
- Documents that appear altered or incomplete: Missing pages, inconsistent signatures or vague language can be signs of a fraudulent deed.
- Offers that seem too good to be true: Scammers often lure victims with below-market prices, fake urgency, or off-market deals requiring quick cash.
- Requests to skip official channels: If someone pushes to avoid the county recorder’s office or title company, they may be trying to conceal a false chain of title.
- Inflated appraisals or inconsistent loan information: These are common signs of mortgage misrepresentation to get more money than the property is worth.
- Unfamiliar individuals involved in decisions for elderly homeowners: This is a sign of elder financial abuse especially if documents are being signed under pressure or without understanding.
If you notice any of these signs, pause the transaction and consult a trusted professional immediately.
Steps to Safeguard Your Property
There are proactive steps every property owner should take:
- Keep your title insurance up to date
- Conduct regular chain of title reviews
- Work with trusted professionals to verify ownership documents
- Avoid informal transfers that may later lead to filing a lawsuit for fraudulent conveyance
Consider placing fraud alerts with your title company and consult legal counsel before making changes to your deed.
Tips for Homeowner Protection
Stay vigilant:
- Monitor your mail and property tax records for unexpected changes
- Double-check all documents requiring a signature or notarization
- Avoid unsolicited offers or pressure tactics
- Save records from past transactions to aid any future real estate litigation
Legal Remedies for Real Estate Fraud
If you’re a victim of fraud, California law provides both civil and criminal avenues. Civil cases can recover financial losses, while criminal charges may be pursued by the DRE or District Attorney’s office.
Understanding your options—and acting quickly—is crucial. Legal remedies for real estate fraud may include injunctions, damage claims, or reversing fraudulent transfers.
When to Involve a Real Estate Attorney
If you suspect fraud, don’t wait. The real estate attorneys at Stone & Sallus specialize in uncovering deceptive practices and protecting your legal rights.
From reviewing suspicious deeds to representing clients in real estate litigation, our team helps you move forward with clarity and strength. Contact us today.
