A bill aimed at preventing real estate title fraud in Alabama advanced Tuesday after the Senate County and Municipal Government Committee approved a substitute version that significantly revises the original proposal.
Senate Bill 292, sponsored by Senator Arthur Orr, R-Decatur, would establish new protections designed to prevent property title theft and provide tools for victims to recover ownership of stolen property. The committee adopted a substitute version of the legislation before voting to give the bill a favorable report.
Orr told committee members the measure is intended to modernize Alabama’s system for protecting property ownership as real estate transactions increasingly move online.
“The easy explanation of what the bill is trying to do… is to protect titles in Alabama,” said Orr. “Right now we have a system that’s vested in the 20th century.”
Orr said the legislation would bring Alabama “into the 21st century” by creating stronger safeguards around property records and real estate transfers.
The bill is designed to address cases of scammers filing forged deeds or fraudulent documents. During the committee discussion, Senator Linda Coleman-Madison, D-Birmingham, noted that the issue can escalate quickly and remain unnoticed until it’s too late.
“You think you own the property, you’ve been paying the taxes and everything, and they come up with these forged documents. They push a quick sale, and the next thing you know, your property is sold out from under you and you don’t even know it,” said Coleman-Madison.
As originally introduced, SB292 proposed a wide-ranging framework to combat title fraud. The bill would create new criminal penalties related to fraudulent property transfers, establish an Alabama Title Fraud Recovery Fund for victims and allow an expedited court process to restore ownership of property obtained through fraud.
The original version also directed the Alabama Securities Commission to oversee a complaint process for fraudulent real estate transactions and allowed probate judges to implement systems that notify property owners if documents affecting their property are recorded.
Orr said the substitute adopted by the committee incorporates numerous revisions developed after discussions with stakeholders following the bill’s filing.
“The substitute is a combination of a lot of edits,” said Orr. “I have to give a lot of credit to the Realtors Association and their representative for working with multiple entities—lawyers, title insurance companies, the Securities Commission, bankers, lenders and others.”
According to Orr, the substitute reflects input from those groups and includes technical changes intended to ensure the proposal works with existing real estate and financial systems.
“My understanding is now a bill that, since everybody’s touched it and changed it as they wished, shouldn’t have a lot of controversy to it,” Orr said.
After adopting the substitute version, the committee voted to issue a favorable report on SB292, advancing the legislation for further consideration in the Senate.
