Preventing Deed Fraud.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 431

Short Title: Preventing Deed Fraud. (Public)
Sponsors: Representatives Liu, Stevens, Biggs, and Budd (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Judiciary 2, if favorable, Rules, Calendar, and Operations of the House
March 19, 2025
*H431-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ALLOW THE REGISTER OF DEEDS TO REFUSE TO RECORD CE RTAIN 2
SUSPICIOUS INSTRUMEN TS, TO AUTHORIZE THE REGISTER OF DEEDS T O 3
REQUIRE NON-TRUSTED SUBMITTERS TO PRODUCE A GOVERNMENT-ISSUED 4
PHOTOGRAPHIC IDENTIF ICATION CARD BEFORE RECORDING A DEED OR 5
CERTAIN OTHER INSTRU MENTS, TO REQUIRE TH E REGISTER OF DEEDS TO 6
PROVIDE ACCESS TO A FRAUD DETECTION ALER T SYSTEM, TO REQUIRE A 7
STUDY OF ALTERNATIVE FRAUD DETECTION ALE RT SYSTEMS, AND TO 8
PROVIDE FOR AN EXPED ITED CAUSE OF ACTION TO QUIET T ITLE AFTER AN 9
ATTEMPTED FRAUDULENT CONVEYANCE. 10
The General Assembly of North Carolina enacts: 11
12
PART I. IDENTIFY VERIFICATION AND SUSPICIOUS INSTRUMENTS 13
SECTION 1. Article 2 of Chapter 161 of the General Statutes is amended by adding 14
a new section to read: 15
"§ 161-32. Identity verification and suspicious instruments. 16
(a) Definitions. – The following definitions apply in this section: 17
(1) Instrument. – Any document that purports to convey title to, or an interest in, 18
real property, such as a deed, deed of trust, or other similar document. 19
(2) Suspicious instrument. – An instrument submitted for registration for which 20
the register of deeds has found any of the following: 21
a. The name o r information of an acknowledging officer who has 22
purported to acknowledge the instrument does not match the official 23
records for that acknowledging officer. 24
b. The instrument purports not to be subject to the laws of the United 25
States or the laws of this State. 26
c. The document does not conform to registration requirements 27
established by the laws of this State. 28
d. The instrument is materially false, fictitious, or fraudulent and has not 29
been submitted by a trusted submitter or an authorized representative 30
of a trusted submitter. 31
(3) Trusted submitter. – Includes all of the following: 32
a. A title insurance company as described in Article 26 of Chapter 28 of 33
the General Statutes. 34
b. An attorney licensed to practice in this State. 35
General Assembly Of North Carolina Session 2025
Page 2 House Bill 431-First Edition
c. A financial institution as defined in G.S. 53B-2. 1
(b) Identity Verification. – Notwithstanding any other provision to the contrary in this 2
Chapter, when an instrument is presented to the register of deeds for registration by an individual 3
who is not a trusted submitter or the authorized agent of a trusted submitter, the register of deeds 4
shall require the person presenting the instrument to produce a government-issued photographic 5
identification card as follows: 6
(1) If an individual who is not a trusted submitter or an authorized agent of a 7
trusted submitter presents an instrument to the register of deeds for registration 8
in person, the register of deeds shall require the individual to produc e a 9
government-issued photographic identification card for inspection by the 10
register of deeds before registering the instrument. The register of deeds must 11
record the name and address of such person, as the information appears on the 12
identification card, in a record to be kept by the register of deeds, along with 13
the official records book and page n umber or instrument number of the 14
instrument registered in connection to the production of the identification 15
card. Such a record may not be made available for viewing on the register of 16
deeds' official public website but shall be made available for public inspection 17
and copying as required by the public records laws of this State. 18
(2) If an individual who is not a trusted submitter or an authorized agent of a 19
trusted submitter presents an instrument in the form of an electronic 20
document, as defined in G.S. 47-16.3(2), to the register of deeds, as provided 21
by Article 1A of Chapter 47 of the General Statutes, the register of deeds shall 22
require the individual to submit a photocopy of a government -issued 23
photographic identification card b efore registering the instrument. The 24
register of deeds must not e on the photocopy of the identification card the 25
official records book and page number or instrument number assigned to the 26
instrument registered in connection to the submission of the photocopy of the 27
identification card and retain the photocopy of such identification card in a 28
record to be kept by the register of deeds . Such a record may not be made 29
available for viewing on the register of deeds' official public website but shall 30
be made available for public inspection and copying as required by the public 31
records laws of this State. However, a person who submits a photocopy of his 32
or her identification card under this subsection may redact from the photocopy 33
of such identification card before submission all of the information he or she 34
does not wish to be made public, except for his or her name, address, and 35
photograph. 36
(c) Refusing to Register. – Notwithstanding any other provision to the contrar y in this 37
Chapter, the register of deeds shall refuse to register an instrument if one of the following occurs: 38
(1) The register of deeds deems the instrument presented for registration a 39
suspicious instrument under subdivision (a)(2) of this section. 40
(2) The individual presenting the instrument for registration is not a trusted 41
submitter or an authoriz ed representative of a trusted submitter and fails to 42
provide the register of deeds with a government -issued photographic 43
identification card as required by subsection (b) of this section. 44
(3) The individual presenting the instrument for registration is not a trusted 45
submitter or an authorized representative of a trusted submitter and the name 46
on the government -issued photographic identification card presented by the 47
individual pursuant to subsection (b) of this section does not match the name 48
of the grantor or conveying party in the instrument presented for registration. 49
General Assembly Of North Carolina Session 2025
House Bill 431-First Edition Page 3
(d) Additional Actions for Suspicious Instruments. – Upon finding that an instrument 1
presented for registration is a suspicious instrument under sub division (a)(2) of this section, the 2
register of deeds may do any of the following: 3
(1) Report the suspicious instrument to an appropriate law enforcement agency. 4
(2) Notify the acknowledging officer purported to have acknowledged the 5
instrument of the reason for the register of deeds finding that the instrument 6
is a suspicious instrument. 7
(e) Notice of Requirements . – The register of deeds shall provide notice of the 8
identification verification requirement described in subsection (b) of this section to the register 9
of deeds' official public website. 10
(f) Legal Protections and Remedies. – 11
(1) An injured person has a cause of action against a register of deeds for that 12
register of deeds ' refusal to record an instrument based on that register of 13
deeds' allegedly erroneous finding that the instrument is a suspicious 14
instrument, as allowed by sub division (c)(1) of this se ction. In an action 15
authorized by this subsection, an injured person is only entitled to appropriate 16
declaratory or injunctive relief. Notwithstanding G.S. 161-16, a register of 17
deeds shall not be liable for damages or any other claim of monetary relief in 18
an action brought under this subdivision. 19
(2) There is no right or cause of action against, and no civil liability on the part 20
of, the register of deeds or the county with respect to the register of deeds ' 21
requirement of an identification card or any refusal to register a n instrument 22
as allowed by subdivision (c)(2) or (c)(3) of this section. 23
(g) Confidentiality. – Nothing in this section shall be construed to require the register of 24
deeds to provide or allow access to a record or other information that is considered confidential 25
information as defined by G.S. 132-1.2." 26
27
PART II. FRAUD DETECTION ALERT SYSTEM 28
SECTION 2. Article 2 of Chapter 161 of the General Statutes is amended by adding 29
a new section to read: 30
"§ 161-33. Fraud detection alert system. 31
(a) The following definitions apply in this section: 32
(1) Fraud detection alert system. – A system which sends automated recording 33
notifications. 34
(2) Land record. – A deed, deed of trust, mortgage, or other document purporting 35
to convey or encumber an interest in real property. 36
(3) Monitored identity. – A personal, trust, or business name submitted by a 37
registrant for monitoring under a fraud detection alert system. 38
(4) Recording notification. – A notification sent by electronic mail indicating to 39
a registrant that a land record associated with the registrant 's monitored 40
identity has been recorded in the office of the register of deeds. 41
(5) Registrant. – A person who enrolls in a fraud detection alert system. 42
(b) The register of deeds shall ensure that registration for a fraud detection alert system 43
is possible through an electronic registration portal, which portal shall inc lude at least all of the 44
following features: 45
(1) Be accessible through a direct link on the register of deeds ' official public 46
website. 47
(2) Allow a registrant to subscribe to receive recording notifications for at least 48
five monitored identities per valid electronic mail address provided. 49
(3) Include a method by which a registrant may unsubscribe from the system. 50
General Assembly Of North Carolina Session 2025
Page 4 House Bill 431-First Edition
(4) List a phone number at which the register of deeds ' office may be contacted 1
during normal business hours with questions related to the system. 2
(5) Send an automated electronic mail message to a registrant confirming the 3
registrant's successful registration for or action to unsubscribe from the 4
system, which message must identify each monitored identity for which a 5
subscription was received or canceled. 6
(c) When a land record is recorded for a monitored identity, a recording notification must 7
be sent within 24 hours after the recording has been completed to each registrant who is 8
subscribed to receive recording notifications for that monitored identity. Such notification must 9
contain at least the following: 10
(1) Information identifying the monitored identity for which the land record was 11
filed. 12
(2) The land record's recording date. 13
(3) The official record book and page number or instrument number assigned to 14
the land record by the register of deeds. 15
(4) Instructions for electronically searching for and viewing the land record using 16
the assigned official record book and page number or instrument number. 17
(5) A phone number at which the register of deeds' office may be contacted during 18
normal business hours with questions related to the recording notification. 19
(d) There is no right or cause of action against, and no civil liability on the part of, the 20
register of deeds or the county with respect to the creation, maintenance, or operation of a fraud 21
detection alert system as required by this section. 22
(e) The register of deeds may charge a reasonable fee to a registrant for enrolling in the 23
fraud detection alert system in an amount that does not exceed the actual cost of maintaining and 24
allowing access to the system." 25
SECTION 3.(a) The Legislative Research Commission (LRC) shall study the 26
feasibility of amending G.S. 161-33, as enacted in Section 2 of this act, to create a fraud detection 27
alert system where everyone who submits a land record for registration is automatically enrolled 28
in the fraud detection alert system without paying a fee. Before enrollment, the register of deeds 29
would provide each individual with a notice explaining the system – its purpose, how it works, 30
and how to opt out of enrollment. 31
As part of its study, the LRC shall do all of the following: 32
(1) Evaluate the practicality of implementing a fraud detection alert system with 33
automatic enrollment and an opt -out option, including techn ological and 34
staffing requirements for registers of deeds across all counties. 35
(2) Examine the fiscal impact on the State, counties, and/or registers of deeds, 36
including costs associated with developing, maintaining, and operating a fraud 37
detection alert system without charging a fee to the participant. 38
(3) Evaluate how well such a fraud detection alert system would prevent fraud as 39
compared to other potential systems or measures. 40
SECTION 3.(b) The LRC shall report its findings, together with any proposed 41
legislation, to the 2026 Regular Session of the 2025 General Assembly upon its convening. 42
43
PART III. PROVIDING FOR AN EXPEDITED CAUSE OF ACTION TO QUIET TITLE 44
AFFECTED BY FRAUDULENT INSTRUMENTS 45
SECTION 4. Article 1 of Chapter 41 of the General Statutes is amended by adding 46
a new section to read: 47
"§ 41-10.2. Titles quieted; fraudulent instruments. 48
(a) As used in this section, the following definitions apply: 49
(1) Instrument. – Any of the following: 50
General Assembly Of North Carolina Session 2025
House Bill 431-First Edition Page 5
a. A transfer of title to real property by deed or devise or other instrument 1
transferring title to real property. 2
b. A deed of trust, mortgage, judgment, lien, encumbrance, financing 3
statement, affidavit, notice, memorandum, or any other instrument that 4
establishes a security interest in real property. 5
c. A contract, right of refusal, or any other instrument that purports to 6
establish an interest, encumbrance, claim, or right relating to real 7
property. 8
(b) The actual owner of an interest in real property subject to a recorded false, fictitious, 9
or fraudulent instrument may seek expedited relief under this section by filing an action in district 10
court alleging the filing or recording of a false, fictitious, or fraudulent instrument in a public 11
record or a private record generally available to the public. The notice shall be served and proof 12
of service shall be made in any manner provided by the Rules of Civil Procedure for service of 13
summons, including service by registered mail or certified mail, return receipt requested. After a 14
minimum of five days' notice in a manner prescribed in Rule 5 of the Rules of Civil Procedure 15
and opportunity to be heard to all persons claiming an ownership interest in the property, any 16
lienholder of record, including any person to whom a security instrument directs notice to be sent 17
and any person obligated to repay the indebtedness secured by the instrument, the court shall 18
convene a hearing. For purposes of the notice requirement in this subsection, the party seeking 19
relief may serve the person listed as grantor in the recorded purportedly false, fictitious, or 20
fraudulent instrument at the address listed in the instrument. If the court finds that there is no 21
statutory, contractual, or other merited legal justification for t he instrument, the court shall find 22
that the recorded instrument is false and is void as a matter of law and shall enter an order to 23
remove the cloud from the title to the real property. The submission of an original instrument 24
demonstrating source of title, affidavit, or a lis pendens, notice of previous fraud, or other similar 25
instrument recorded by the actual owner of an interest in the real property shall be considered 26
evidence of fraudulent activity. The court may also include in the order any of the f ollowing 27
types of relief: 28
(1) Grant to a prevailing party possession of the real property and order the 29
ejectment of any party on the premises. 30
(2) Award attorneys' fees and other costs for the action to the prevailing party. 31
(3) Stay any proceedings involving the subject real property in which the property 32
owner or owners are not a party to. 33
(4) Upon a finding by the court that an action filed under this section is frivolous 34
or malicious, assess a civil penalty of not more than ten thousand dollars 35
($10,000), of which the clear proceeds assessed under this subdivision shall 36
be remitted to the Civil Penalty and Forfeiture Fund in accordance with 37
G.S. 115C-457.2. 38
(5) Upon a finding by the court that a party has presented for filing or recording 39
a false, fictitious, or fraudulent instrument as described in this section more 40
than once, enter a pre-filing injunction against the party. 41
(6) Enjoin a party from listing the real property for sale, lease, or any other similar 42
advertisement. 43
(c) Upon being presented with an order duly issued by a court of competent jurisdiction 44
of this State declaring that an instrument already recorded is false and void as a matter of law, 45
the register of deeds or clerk of superior court that received the recording shall record an d 46
cross-index the court's order finding the instrument to be false. The register of deeds or clerk of 47
superior court may also conspicuously mark on the first page of the original record previously 48
recorded the following statement: "THE CLAIM ASSERTED IN THIS DOCUMENT IS FALSE 49
AND IS NOT PROVIDED FOR BY THE GENERAL LAWS OF THIS STATE." 50
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(d) In addition to any civil penalties provided for in this section, the presentation of an 1
instrument for recording with a register of deeds or a clerk of superior court that is determined to 2
be materially false, fictitious, or fraudulent shall constitute a violation of G.S. 75-1.1. 3
(e) The Administrative Office of the Courts shall develop a form for the expedited relief 4
filing established by this section , and the clerk of superior court shall make the form available 5
for a petitioner. In addition to the requirements set forth in this section, the form shall include 6
clear language notifying the filing party that providing false information or statements is perjury 7
pursuant to G.S. 14-209 and punishable as a Class F felony." 8
9
PART IV. EFFECTIVE DATE 10
SECTION 5. Sections 1 and 2 of this act become effective October 1, 2025, and 11
apply to instruments and documents presented for registration on or after that date. Section 4 of 12
this act becomes effective October 1, 2025, and applies to causes of action arising on or after that 13
date. The remainder of this act is effective when it becomes law. 14