Protecting Your Real Estate Investment

  • It is possible for thieves to file fraudulent deeds and attempt to sel property they do not own through a fake property sale.
  • That’s why it is so important for buyers to purchase title insurance when buying commercial or residential property.
  • In our title attorney business, we work with a local title company to provide title services to buyers and sellers of commercial property and hopefully protect their investment from frauds like this.

I had a conference this past weekend to attend in Dallas. There were good speakers but – like with any conference – I found myself drifting to my phone every once in a while to read some internet articles. And while doing, I read a few about folks scamming property owners with fraudulent deeds. Obviously as a real estate attorney this interests me but we also had a client recently who thought something similar happened to them.

I don’t want to be the local evening news and scare monger in this article (“SCAMMERS ARE COMING FOR YOUR PROPERTY! TUNE IN TO SEE HOW YOU CAN PROTECT YOURSELF!). But these scams do sometimes happen. And when they do, they can be a significant nuisance. As property owners, therefore, we have to take precautions to protect our investment.

And that’s where title insurance comes in. I know some folks hate it and hate the cost. But it really is important. So what are these scams? And how can title insurance protect your property? That’s what we talk about this week.

Beware the Fraudulent Deed Scam


The people who commit the fraudulent deed scam are trying to steal your money. The basic premise is that they forge a deed (often a quitclaim) allegedly transferring the property from the current owner to them. They then file that fraudulent deed with the county clerk. At that point, the thief may try to sell the property to a third party while showing they have a deed to the party in the county property records.

This is, obviously, a big problem for the potential buyer. If not caught, the buyer could pay a lot of money for what he thinks is a property investment. Then, after closing, he does not have any rights in the property because the thief had nothing to sell except lies.

Title Insurance can Protect Your Investment from Scams


This is where title insurance comes in to help protect you. A basic title insurance policy:

  • Should alert you if you are buying a property from a fraudulent seller; but
  • If the title company misses the fraudulent deed, reimburse you for your lost investment.

It is, of course, important to read your title commitment thoroughly prior to closing because there could be exclusions to the coverage. But assuming you have normal, full coverage, a title insurance policy can protect you against buying from a fraudulent seller.

Key to Finding a Good Title Company


There is little doubt, therefore, that title insurance is a must purchase when buying a new property. Its equally important to work with a title company and escrow agent that will provide the coverage that you need.

First, you want to make sure you and/or your lawyer have read and understand the title commitment (pre-cursor to the actual policy) prior to close. As I wrote above, there can be exclusions to the policy and its very important to understand what those may be.

Second, you want a title company that understands how important it is to get the deal closed. To be a good closer, its vital to fully understand the Texas Department of Insurance Rules. But if the buyer or seller needs something the TDI rules do not allow, a good closer will also help find a solution that satisfies all of the parties. Because at the end of the day, making sure the deal closes is very important to both the buyer and the seller.

As title fee attorneys at Bukowski Law Firm, we understand how important it is both for the parties to be protected and to get the deal closed. We pride ourselves on providing the best title and escrow services around. We would love, therefore, to help you close your next deal.



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