BILL NUMBER: S5177
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the executive law, in relation to the requirements for
notaries public and commissioners of deeds relating to certain instru-
ments affecting real property; and to amend the penal law, in relation
to forgery and the offering of false documents concerning residential
real property
 
PURPOSE:
The purpose of this bill is to prevent fraudulent deed transfers by
increasing the accountability of notaries who place their seal on docu-
ments of conveyance that transfer ownership of residential real proper-
ty.
This bill establishes that notaries and commissioners of deeds who are
not employed by a title insurance agency, law firm or financial institu-
tion, and who are involved in executing a document of conveyance, must
file a notarial record of the notarial act. The bill provides a template
of the notarial record, which includes, among other information, a
description of the nature of the property, the names of the parties
involved in the transfer, and the form of identification that was
presented. The notary is required to file the notarial record with the
County Clerk or the Recorder of Deeds.
 
SUMMARY OF PROVISIONS:
Section 1: Adds a new section to the executive law that requires nota-
ries to complete a notarial record when they are notarizing a document
of conveyance. Subdivision 1 of the bill describes who the bill applies
to all notaries licensed in the State of New York and Recorder of Deeds.
Subdivision 2 of the section defines what types of documents are
included in the definition of a document of conveyance.
Subdivisions 3 and 4 of the section describe exactly what information
the notary is required to obtain from the individuals who are using the
notary's seal on a document to transfer ownership of residential real
property.
Subdivision 5 establishes the requirement that notaries file the nota-
rial record with the County Clerk or the Recorder of Deeds where the
property is located within fourteen days of the record's completion.
Notaries who are employed through a title insurance agency, law firm,
financial institution, or who are working as an attorney at law are
required to keep the document as a business record as opposed to filing
with the clerk.
Subdivision 6 discusses how such record is made available in the limited
circumstances of a government investigation, court order, or a request
from the grant or named in the record.
Subdivision 7 establishes that if a notary fails to comply with the
bill's provisions, the notary will be subject to file an official bond
for no less than $25,000 for the first offense, and $50,000 for each
additional offense.
Subdivision 8 affirms that a notary's failure to comply, however, will
not invalidate the property transfer in the absence of fraud and
forgery.
§ 2: Permits notaries to charge up to $25 dollars when notarizing a
document of conveyance.
§ 3: Section 170.10 of the penal law, subdivision 1 as amended by chap-
ter 949 of the laws of 1984, is amended. Forgery in the second degree.
§ 4: § 170.15 Forgery in the first degree.
§ 5. The penal law is amended by adding two new sections: 175.31 and
175.36.
§ 6. Act and Effective date.
 
JUSTIFICATION:
Huge spikes in real estate values and lax standards for property trans-
fers have left many homeowners vulnerable to deceptive practices by
individuals and entities seeking to defraud homeowners out of their
title to the home to make a profit. The two most common mechanisms of
deed theft are through forged deeds and fraudulently transferred deeds.
In the instances of a forged deed, the forger signs the document convey-
ing real property as both the seller and buyer without any right to it.
This type of theft typically affects properties in which ownership has
recently passed through inheritance and these deed scammers quickly file
the forged deed, which legitimizes their title, and enables them to take
possession of the premises. In the case of fraudulently transferred
deeds, homeowners sign over their deeds, either knowingly or unknowing-
ly, under the false pretenses proffered by scammers. These individuals
target homes in or nearing foreclosure by approaching the vulnerable
homeowners with promises of refinancing, preventing foreclosure or some
other financial relief, and some even manipulate the homeowners to do a
short sale, by which they promise to pay homeowners a sum of money to
satisfy the outstanding mortgage in exchange for short term title to the
property which they in turn promise to give back after the loan is
repaid. Unwitting homeowners are often left without a home and still
owing their mortgages.
This bill seeks to prevent both scenarios by requiring the notary who is
present at the signing of the document of conveyance to fill out and
file a notarial record. This record will indicate among other things the
parties to the conveyance, the documents of identification that are
presented to the notary, and the relationship the grantee and grantor
have to one another. The rationale is that the creation of such a docu-
ment will encourage the notary to be vigilant in identifying who the
grantor and grantee are and the legitimacy of the transaction. Further
more, the filing of the record will assist in the subsequent investi-
gation and prosecution of fraudulent deed transfers by identifying any
pattern of fraudulent actors.
 
PRIOR LEGISLATIVE HISTORY:
2015-2016: A10425A - Ordered to Third reading cal.317
2017-2018: A6246A - Ordered to Third reading cal.440
2019-2020: A5201 - Ordered to Third reading cal.199
2020-2021: A4277 - Referred to Judiciary, reported referred to Codes,
reported referred to Rules, reported, rules report cal. 549, ordered to
third reading rules cal. 549, ordered to third reading cal. 145, amended
on third reading A4277A, Passed Assembly, delivered to Senate, referred
to codes.
2023-2024: S5688A Comrie/ A329B Walker; Passed Senate, ordered 3rd read-
ing cal
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S5177: 136 executive law, 170.10 penal law, 170.15 penal law