HOUSE BILL NO. 1943 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE HRUZA.
5055H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To repeal sections 486.735, 570.095, and 578.700, RSMo, and to enact in lieu thereof five new sections relating to protections against document fraud, with penalty provisions.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 486.735, 570.095, and 578.700, RSMo, are repealed and five new 2 sections enacted in lieu thereof, to be known as sections 59.306, 443.295, 486.735, 570.095, 3 and 578.700, to read as follows: 59.306. 1. This section shall be known and may be cited as "The Real Property 2 Fraud Prevention Act". 3 2. The recorder of deeds of each county of this state shall provide notice as 4 required under this section to each property owner or owner of record of a parcel of real 5 property, as determined by the most recent real property tax records, that a general 6 warranty deed or quitclaim deed that affects the ownership of such parcel of real 7 property has been submitted for recording. 8 3. The recorder of deeds shall: 9 (1) Delay the recording of a deed described under subsection 2 of this section for 10 at least five working days from the date of such deed's receipt to provide time for the 11 recorder of deeds to notify each property owner or owner of record of such parcel of 12 real property that such deed has been submitted for recording; 13 (2) Notify each property owner or owner of record of such parcel of real 14 property by telephone, text message, facsimile, or email, if such information is known; 15 and
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 1943 2
16 (3) Send such notification by first-class mail to the address of record of each 17 property owner or owner of record of such parcel of real property, informing such 18 owner that a deed that affects such owner's ownership interest in the real property 19 described by such deed has been submitted for recording. 20 4. (1) If each property owner or owner of record of such parcel of real property 21 provides written confirmation that the deed presented for recording is legitimate, the 22 delay required under subdivision (1) of subsection 3 of this section shall no longer apply, 23 and the recorder of deeds may immediately proceed with the recording of the deed. 24 (2) If, prior to the expiration of the delay required under subdivision (1) of 25 subsection 3 of this section, the recorder of deeds is notified by each property owner or 26 owner of record of such parcel of real property that such deed is fraudulent, the 27 recorder of deeds shall delay the recording of the deed for at least an additional two 28 business days to provide time for each property owner or owner of record of such parcel 29 of real property to seek an order from a court of competent jurisdiction to prohibit the 30 recording of the apparently fraudulent deed. 31 5. The recorder of deeds shall not delay the recording of a general warranty deed 32 or quitclaim deed as required under this section if at least one of the following 33 conditions has been met: 34 (1) The general warranty deed or quitclaim deed presented for recording was 35 submitted by a real estate broker who holds a valid Missouri real estate broker license 36 under chapter 339; or 37 (2) The general warranty deed or quitclaim deed presented for recording was 38 reviewed by a title company that is duly licensed under chapter 381 and such title 39 company has issued title insurance to guaranty the validity of the deed for the 40 prospective owner or owners of such parcel of real property. 41 6. (1) As used in this subsection, "defective deed" means a deed that: 42 (a) Fails to provide adequate grantee or grantor information; 43 (b) Fails to provide a proper description of the parcel of real property being 44 transferred; 45 (c) Lacks the signature of a grantor; 46 (d) Does not have a proper notary acknowledgment and seal under sections 47 486.730 and 486.760; or 48 (e) Is notarized by a notary whose commission has expired prior to notarizing 49 the deed. 50 (2) The recorder of deeds of each county of this state is hereby authorized to 51 reject and return a general warranty deed or quitclaim deed that has been deemed by 52 the recorder of deeds to be a defective deed. HB 1943 3
443.295. A person shall not obtain a loan with a quitclaim deed unless the person 2 is a party to the original warranty deed or obtained title to the real property through a 3 quiet title action. 486.735. 1. A vendor or manufacturer shall register with the secretary prior to selling 2 or manufacturing notary seals. The secretary shall maintain an internet site for the purpose of 3 allowing vendors and manufacturers to confirm the current standing of any notary in the state. 4 2. A vendor or manufacturer shall not provide a notary seal to a purchaser claiming to 5 be a notary, unless the purchaser presents a notary commission issued by the secretary, and 6 unless: 7 (1) In the case of a purchaser appearing in person, the vendor or manufacturer 8 identifies this individual as the person named in the commission, through either personal 9 knowledge or satisfactory evidence of identity; or 10 (2) In the case of a purchaser ordering a seal by mail or delivery service, the vendor or 11 manufacturer confirms the notary's standing as a commissioned notary through the internet 12 site. 13 3. For each commission, a vendor or manufacturer shall make or sell only one seal 14 and, if requested by the person presenting the commission, only one embossing seal. 15 4. After manufacturing or providing a notary seal, the vendor shall affix an image of 16 all seals on a form as prescribed by the secretary and, within seven business days, send the 17 completed form to the secretary, retaining a copy of the form and the commission for a period 18 of five years. 19 5. A notary obtaining a seal as a result of a name change shall present a copy of the 20 confirmation of notary's name or address change from the secretary in accordance with 21 sections 486.780 and 486.785. 22 6. A vendor or manufacturer who fails to comply with this section shall be subject to a 23 fine of [one] five thousand dollars for each violation. For multiple violations, a vendor's 24 permission to sell or manufacture notary seals may be withdrawn by the secretary. Such 25 violation shall not preclude the civil liability of the vendor to parties injured by the vendor's 26 failure to comply with this section. 570.095. 1. A person commits the offense of filing false documents if: 2 (1) With the intent to defraud, deceive, harass, alarm, or negatively impact 3 financially, or in such a manner reasonably calculated to deceive, defraud, harass, alarm, or 4 negatively impact financially, he or she files, causes to be filed or recorded, or attempts to file 5 or record, creates, uses as genuine, transfers or has transferred, presents, or prepares with 6 knowledge or belief that it will be filed, presented, recorded, or transferred to the secretary of 7 state or the secretary's designee, to the recorder of deeds of any county or city not within a 8 county or the recorder's designee, to any municipal, county, district, or state government HB 1943 4
9 entity, division, agency, or office, or to any credit bureau or financial institution any of the 10 following types of documents: 11 (a) Common law lien; 12 (b) Uniform commercial code filing or record; 13 (c) Real property recording; 14 (d) Financing statement; 15 (e) Contract; 16 (f) Warranty, special, or quitclaim deed; 17 (g) Quiet title claim or action; 18 (h) Deed in lieu of foreclosure; 19 (i) Legal affidavit; 20 (j) Legal process; 21 (k) Legal summons; 22 (l) Bills and due bills; 23 (m) Criminal charging documents or materially false criminal charging documents; 24 (n) Any other document not stated in this subdivision that is related to real property; 25 or 26 (o) Any state, county, district, federal, municipal, credit bureau, or financial 27 institution form or document; and 28 (2) Such document listed under subdivision (1) of this subsection contains materially 29 false information; is fraudulent; is a forgery, as [defined] described under section 570.090; 30 lacks the consent of all parties listed in a document that requires mutual consent; or is invalid 31 under Missouri law. 32 2. Filing false documents under this section is a class [D] C felony for the first 33 offense except the following circumstances shall be a class [C] B felony: 34 (1) The defendant has been previously found guilty or pleaded guilty to a violation of 35 this section; 36 (2) The victim or named party in the matter: 37 (a) Is an official elected to municipal, county, district, federal, or statewide office; 38 (b) Is an official appointed to municipal, county, district, federal, or statewide office; 39 or 40 (c) Is an employee of an official elected or appointed to municipal, county, district, 41 federal, or statewide office; 42 (3) The victim or named party in the matter is a judge or magistrate of: 43 (a) Any court or division of the court in this or any other state or an employee thereof; 44 or 45 (b) Any court system of the United States or is an employee thereof; HB 1943 5
46 (4) The victim or named party in the matter is a full-time, part-time, or reserve or 47 auxiliary peace officer, as defined under section 590.010, who is licensed in this state or any 48 other state; 49 (5) The victim or named party in the matter is a full-time, part-time, or volunteer 50 firefighter in this state or any other state; 51 (6) The victim or named party in the matter is an officer of federal job class 1811 who 52 is empowered to enforce United States laws; 53 (7) The victim or named party in the matter is a law enforcement officer of the United 54 States as defined under 5 U.S.C. Section 8401(17)(A) or (D); 55 (8) The victim or named party in the matter is an employee of any law enforcement or 56 legal prosecution agency in this state, any other state, or the United States; 57 (9) The victim or named party in the matter is an employee of a federal agency that 58 has agents or officers of job class 1811 who are empowered to enforce United States laws or 59 is an employee of a federal agency that has law enforcement officers as defined under 5 60 U.S.C. Section 8401(17)(A) or (D); or 61 (10) The victim or named party in the matter is an officer of the railroad police as 62 [defined] authorized under section 388.600. 63 3. For a penalty enhancement as described under subsection 2 of this section to apply, 64 the occupation of the victim or named party shall be material to the subject matter of the 65 document or documents filed or the relief sought by the document or documents filed, and the 66 occupation of the victim or named party shall be materially connected to the apparent reason 67 that the victim has been named, victimized, or involved. For purposes of subsection 2 of this 68 section and this subsection, a person who has retired or resigned from any agency, institution, 69 or occupation listed under subsection 2 of this section shall be considered the same as a 70 person who remains in employment and shall also include the following family members of a 71 person listed under subdivisions (2) to (9) of subsection 2 of this section: 72 (1) Such person's spouse; 73 (2) Such person or such person's spouse's ancestor or descendant by blood or 74 adoption; or 75 (3) Such person's stepchild while the marriage creating that relationship exists. 76 4. Any person who pleads guilty or is found guilty under subsections 1 to 3 of this 77 section shall be ordered by the court to make full restitution to any person or entity that has 78 sustained actual losses or costs as a result of the actions of the defendants. Such restitution 79 shall not be paid in lieu of jail or prison time but rather in addition to any jail or prison time 80 imposed by the court. HB 1943 6
81 5. (1) Nothing in this section shall limit the power of the state to investigate, charge, 82 or punish any person for any conduct that constitutes a crime by any other statute of this state 83 or the United States. 84 (2) No receiving entity shall be required under this section to retain the filing or 85 record for prosecution under this section. A filing or record being rejected by the receiving 86 entity shall not be used as an affirmative defense. 87 6. (1) Any agency of the state, a county, or a city not within a county that is 88 responsible for or receives document filings or records, including county recorders of deeds 89 and the secretary of state's office, shall, by January 1, 2019, impose a system in which the 90 documents that have been submitted to the receiving agency, or those filings rejected by the 91 secretary of state under its legal authority, are logged or noted in a ledger, spreadsheet, or 92 similar recording method if the filing or recording officer or employee believes the filings or 93 records appear to be fraudulent or contain suspicious language. The receiving agency shall 94 make noted documents available for review by: 95 (a) The jurisdictional prosecuting or circuit attorney or such attorney's designee; 96 (b) The county sheriff or the sheriff's designee; 97 (c) The police chief of a county or city not within a county or such chief's designee; or 98 (d) A commissioned peace officer as defined under section 590.010. 99 100 Review of such documents is permissible for the agent or agencies under this subdivision 101 without the need of a grand jury subpoena or court order. No fees or monetary charges shall 102 be levied on the investigative agents or agencies for review of documents noted in the ledger 103 or spreadsheet. The ledger or spreadsheet and its contents shall be retained by the agency that 104 controls entries into such ledger or spreadsheet for a minimum of three years from the earliest 105 entry listed in the ledger or spreadsheet. 106 (2) The receiving entity shall, upon receipt of a filing or record that has been noted as 107 a suspicious filing or record, notify the chief law enforcement officer or such officer's 108 designee of the county and the prosecutor or the prosecutor's designee of the county of the 109 filing's or record's existence. Such notification shall be made within two business days of the 110 filing or record having been received. Notification may be accomplished via email or via 111 paper memorandum. 112 (3) No agency receiving the filing or record shall be required under this section to 113 notify the person conducting the filing or record that the filing or record is entered as a logged 114 or noted filing or record. 115 (4) Reviews to ensure compliance with the provisions of this section shall be the 116 responsibility of any commissioned peace officer. Findings of noncompliance shall be 117 reported to the jurisdictional prosecuting or circuit attorney or such attorney's designee by any HB 1943 7
118 commissioned peace officer who has probable cause to believe that the noncompliance has 119 taken place purposely, knowingly, recklessly, or with criminal negligence, as described under 120 section 562.016. 121 7. To petition for a judicial review of a filing or record that is believed to be 122 fraudulent, false, misleading, forged, or contains materially false information, a petitioner 123 may file a probable cause statement that delineates the basis for the belief that the filing or 124 record is materially false, contains materially false information, is a forgery, is fraudulent, or 125 is misleading. This probable cause statement shall be filed in the associate or circuit court of 126 the county in which the original filing or record was transferred, received, or recorded. 127 8. A filed petition under this section shall have an initial hearing date within twenty 128 business days of the date the petition is filed with the court. A court ruling of invalid shall be 129 evidence that the original filing or record was not accurate, true, or correct. A court ruling of 130 invalid shall be retained or recorded at the original receiving entity. The receiving entity shall 131 waive all filing or recording fees associated with the filing or recording of the court ruling 132 document in this subsection. Such ruling may be forwarded to credit bureaus or other 133 institutions at the request of the petitioner via motion to the applicable court at no additional 134 cost to the petitioner. 135 9. If a filing or record is deemed invalid, court costs and fees are the responsibility of 136 the party who originally initiated the filing or record. If the filing or record is deemed valid, 137 no court costs or fees, in addition to standard filing fees, shall be assessed. 138 10. (1) Any property owner may present to law enforcement with jurisdiction 139 over the property's location information that a filed or recorded document listed in 140 subsection 1 of this section is fraudulent and conveys the property to a party through a 141 transaction in which the property owner did not consent. 142 (2) Upon the presentation of such information and an affidavit attesting to its 143 accuracy, including an attestation that the property owner did not have knowledge of 144 nor was a party to the transaction in question, local law enforcement shall investigate 145 the property owner's complaint. 146 (3) When law enforcement believes there is reasonable evidence the transaction 147 in question was fraudulent, they shall refer the matter to the prosecuting attorney. 148 (4) Upon the receipt of law enforcement's referral, the prosecuting attorney shall 149 have forty-five days to investigate the information associated with the complaint to 150 determine if there is probable cause that the document was filed or recorded 151 fraudulently. 152 (5) If there is probable cause that the document was filed or recorded 153 fraudulently, the prosecutor s