Lawsuits That Can Undo A Fake Transfer of Property

The first step in determining who owns a certain piece of real estate is to go to the County Clerk’s Office and look up the most recent recorded deed on the property. Because we live in a Race-Notice State, the priority of ownership is frequently established by who documents their deed first (i.e., the First in Time / First in Right Rule) under the Recording Act. The next, and equally important, step is to recognize that a title can be withdrawn or canceled and that the deed is not the final word on real estate ownership. As a result, these top 5 deeds set aside lawsuits should be examined when determining if the recorded deed is in peril. After that, and only then, should a property be sold.

  • Forgery

    A forged deed is null and void, and it cannot transfer ownership. As a result, there is no statute of limitations for a falsified deed to be set aside. The use of exemplars of an individual’s exact signature and expert testimony in a forgery suit to demonstrate that the signature on the deed is a counterfeit is crucial to restoring the proper owner to deeded ownership. As a result, before filing a case, an expert should always consult on a forgery claim and then create an expert report. In particular, where a deed is signed and notarized, there is a presumption of due execution, which must be overturned by clear and persuasive evidence of forgery. As a result, without expert witness corroboration, an interested party’s uncorroborated testimony is insufficient to win the case (i.e., the individual claiming to own the property’s testimony is not persuasive). Overall, simply stating that it is not my signature is insufficient.

  • Fraud

    Unlike forgery, fraud does not render a deed transfer void; rather, a fraudulently obtained deed is voidable. Because of this distinction, there is a statute of limitations for bringing this sort of case, which is either 6 years from the date of the fraud or 2 years from the date of discovery of the fraud. While we often use the term “fraud” in casual conversation, it has a legal definition that must be grasped in order to pursue a legal action. The term of art in a civil case to set aside a deed obtained by fraudulent means indicates that the seller has justified reliance on a major misrepresentation of existing fact made with knowledge of the deception and with the aim to induce such confidence. A classic example of a fraudulent conveyance is when a defendant (potential or actual) in a lawsuit transfers their real estate to their sister in order to become judgment proof and avoid exposure if the case is lost. Because this form of fraudulent conveyance is so widespread, the State’s Debtor-Creditor Law contains an entire article dedicated to preventing these types of transfers. Simply put, you should not transfer your property to evade creditors since the creditors will eventually have the property returned to them, and you will have exposed your transferee to litigation as well.

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  • Lack of Capacity

    A minor, a mentally impaired person (as defined by the laws), and a person of unsound mind does not have the legal capacity to transfer real estate in New York. However, the law does not prevent such people from owning property. As a result, to convey proper title, these individuals must transfer real estate through their legal representatives. A transfer made by a minor, mentally retarded person, or a person of unsound mind, whose status is determined as of the exact date and time of the conveyance (not generally), and made without the presence of a legal representative, is void. These three categories, on the other hand, rarely result in a lawsuit for a lack of capacity. Instead, corporate capacity is a significantly more contentious problem in this state. A corporation, a limited liability company, or a trust that sells real estate can do so only through an authorized representative. As a result, if a lawsuit is filed within 6 years, a real estate conveyance by such an entity that is not accompanied by a corporate resolution granting authority or, at the very least, an examination of the entity’s authorizing documents will be subject to a lawsuit seeking to void the transaction for lack of capacity. As a result, while attempting to sell property, a corporate seller should show a deed along with their authority to execute the sale.

  • Constructive Trust

    When ownership cannot be retained in good conscience, a deed can be transferred by the courts in the interest of fairness. This is the most versatile action for setting aside a deed since it aims to impose equity and justice based on the deed holder’s unfair enrichment as a result of a broken promise. As a result, the Courts are not required to strictly follow the requirements of this suit, which include the existence of a confidential or fiduciary relationship, that the deed holder made a promise (express or implied) that induced a prior transfer of the real estate and that such promise was broken, resulting in the deed holder’s unjust enrichment. Instead, the crucial question is whether the Plaintiff can show that someone benefited at their expense. As a result, the classic lawsuit occurs when two people agree to jointly purchase a piece of property, both share in the down payment, and both contribute to the closing costs, but only one person is listed on the deed for various reasons (e.g., creditworthiness, fear of unmaterialized legal exposure, or manipulation). Following that, the other party files a constructive trust action to obtain joint ownership. Nonetheless, this case must be filed within 6 years of the wrongdoing, so if you are not on the deed for some bizarre reason that you will never understand, you should file this complaint as soon as possible.

  • Adverse Possession

    An adverse possession action can be used to modify the deeded ownership of real estate that has been subject to actual, open, notorious, exclusive, and continuous occupancy for more than ten years. Consider a situation where a neighbor’s hedge extends partially over your property line and no one has ever complained about it until you brought it up when you were selling your home. When you brought the situation to light, your neighbor filed an adverse possession case to claim ownership of the hedge tract. The Adverse Possession Statute was revised in 2008 to discourage claims where one knows the property is genuinely owned by someone else, as your neighbor knew all along. Lawn mowing and the presence of fences, hedges, bushes, and other similar features can no longer be used to establish adverse possession. As a result, your neighbor’s claim is less likely to succeed now than it was in 2008. However, if the hedge existed for ten years prior to 2008 and was thus subject to the previous statute, or if the hedge was a barn, the claim would most likely still be valid today.

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