Title Fraud Prevention Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 2
HOUSE BILL 535
Committee Substitute Favorable 5/6/25

Short Title: Title Fraud Prevention Act. (Public)
Sponsors:
Referred to:
March 27, 2025
*H535-v-2*
A BILL TO BE ENTITLED 1
AN ACT TO PENALIZE T HE FILING OF FRAUDULENT DEEDS AND CONVEYANCES 2
AND TO PREVENT TITLE FRAUD BY AUTHORIZIN G THE REGISTER OF DE EDS 3
TO REQUIRE THE PRODU CTION OF A GOVERNMEN T-ISSUED PHOTOGRAPHIC 4
IDENTIFICATION CARD BEFORE RECORDING A DEED OR CERTAIN OTHE R 5
INSTRUMENTS, REQUIRI NG THE LEGISLATIVE R ESEARCH COMMISSION T O 6
STUDY THE FEASIBILIT Y OF A STATEWIDE FRA UD DETECTION ALERT 7
SYSTEM, PROVIDING FO R A SEPARATE CAUSE O F ACTION TO QUIET TI TLE 8
AFTER A FRAUDULENT C ONVEYANCE, REQUIRING SOURCE OF TITLE TO BE 9
REFLECTED ON DEED OR OTHER TITLE CONVEYANCE, AND REQUIRING T AX 10
OFFICE CERTIFICATION OF LISTED OWNER AND DELINQUENT TAX STAT US 11
ON COUNTY TAX RECORDS. 12
The General Assembly of North Carolina enacts: 13
SECTION 1.1. G.S. 14-122 reads as rewritten: 14
"§ 14-122. Forgery of deeds, wills and certain other instruments.instruments; presentation 15
for filing. 16
(a) If any person, of his that person's own head and imagination, or by false conspiracy 17
or fraud with others, shall wittingly and falsely forge and make, or shall cause or wittingly assent 18
to the forging or making of, or shall show forth in evidence, knowing the same to be forged, any 19
deed, lease or will, or any bond, writing obligatory, bill of exchange, promissory note, 20
endorsement or assignment thereo f; or any acquittance or receipt for money or goods; or any 21
receipt or release for any bond, note, bill or any other security for the payment of money; or any 22
order for the payment of money or delivery of goods, with intent, in any of said instances, to 23
defraud any person or corporation, and thereof shall be duly convicted, the person so offending 24
shall be punished as a Class H felon.is guilty of a Class H felony. 25
(b) If any person present s a deed or transfer of real property of an owner for filing or 26
recording in a public record or a private record generally available to the public , knowing or 27
having reason to know that the deed or conveyance is false or contains a materially false, 28
fictitious, or fraudulent statement or representation , the person so offending is guilty of a Class 29
H felony." 30
SECTION 1.2. G.S. 14-117.8 reads as rewritten: 31
"§ 14 -117.8. Fraudulently renting, leasing, or advertising for sale of residential real 32
property. 33
(a) Offense Involving Fraudulent Rental or Lease. – It is unlawful to rent or lease 34
residential real property to another person knowing that the renter renter, tenant, lessee, landlord, 35
or lessor has no lawful ownership in the property or leasehold interest in the property. 36
General Assembly Of North Carolina Session 2025
Page 2 House Bill 535-Second Edition
(b) Offense Involving Fraudulent Advertising. – It is unlawful to list or advertise 1
residential real property for sale knowing that the purported seller has no legal title or authority 2
to sell the property. 3
(c) Punishment. – Unless the conduct is covered under some other provision of law 4
providing greater punishment, a person who violates this section shall be punished as follows: 5
(1) A person who violates subsection (a) of this section is guilty of a Class H 6
felony. 7
(2) A person who violates subsection (b) of this section is guilty of a C lass I 8
felony. 9
(d) In addition to any criminal penalties provided in this section, knowingly renting or 10
leasing renting, leasing, listing, or advertising residential real property to another person knowing 11
that the renter or lessor renter, tenant, lessee, lessor, landlord, or the person soliciting the listing 12
or advertisement has no lawful ownership or leasehold interest in the property shall constitute a 13
violation of G.S. 75-1.1. In a civil suit initiated by a person who alleges that a person's violation 14
of this section constitutes a violation of G.S. 75-1.1, the presiding judge may allow a reasonable 15
attorneys' fee in accordance with G.S. 75-16.1 to the attorney representing the person bringing 16
the suit without finding that there was an unwarr anted refusal by the party charged with the 17
violation to fully resolve the matter which constitutes the basis of the suit." 18
SECTION 1.3. G.S. 14-209 reads as rewritten: 19
"§ 14-209. Punishment for perjury. 20
If any person knowingly and intentionally makes a false statement under oath or affirmation 21
in any suit, controversy, matter or cause, or in any unsworn declaration deemed sufficient 22
pursuant to G.S. 7A-98 depending in any of the courts of the State; in any deposition or affidavit 23
taken pursuant to law; in any oath or affirmation duly administered of or concerning any matter 24
or thing where such person is lawfully required to be sworn or affirmed, of the following, that 25
person is guilty of perjury, and punished as a Class F felon.felon: 26
(1) A suit, controversy, matter or cause, or unsworn declaration deemed sufficient 27
pursuant to G.S. 7A-98 pending in any of the courts of the State. 28
(2) A deposition or affidavit taken pursuant to law. 29
(3) An oath or affirmation duly administered of or concerning any matter or thing 30
where such person is lawfully required to be sworn or affirmed. 31
(4) An instrument as defined in G.S. 161-32 and presented to a register of deeds 32
for registration." 33
SECTION 1.4. Sections 1.1, 1.2, and 1.3 of this act become effective December 1, 34
2025, and apply to offenses committed on or after that date. 35
SECTION 2.1. Article 2 of Chapter 161 of the General Statutes is amended by 36
adding a new section to read: 37
"§ 161-32. Identity verification and suspicious instruments. 38
(a) Definitions. – The following definitions apply in this section: 39
(1) Instrument. – The term "instrument" shall include any of the following: 40
a. A transfer of title to real property by deed or devise or other instrument 41
transferring title to real property. 42
b. A deed of trust, mortgage, judgment, lien, encumbrance, financing 43
statement, affidavit, notice, memorandum, or any other instrument that 44
establishes a security interest in real property. 45
c. A contract, right of refusal, lease, affidavit, memorandum, or any other 46
instrument that purports to establish an interest, option, encumbrance, 47
right, or any other claim relating to or interest in real property. 48
(2) Suspicious instrument. – An instrument submitted for registration for which 49
the register of deeds has found any of the following: 50
General Assembly Of North Carolina Session 2025
House Bill 535-Second Edition Page 3
a. The instrument purports not to be subject to the laws of the United 1
States or the laws of this State. 2
b. The instrument d oes not conform to registration requirements 3
established by the laws of this State. 4
c. The instrument is submitted by an individual who is not a trusted 5
submitter and the identity verification requirements of subsection (b) 6
of this section are not met. 7
(3) Trusted submitter. – Includes all of the following: 8
a. A title insurance company as described in Article 26 of Chapter 28 of 9
the General Statutes or its authorized agent. 10
b. An attorney licensed to practice in this State or their authorized agent. 11
c. A financial institution as defined in G.S. 53B-2 or their authorized 12
agent. 13
(b) Identity Verification. – Notwithstanding any other provision to the contrary in this 14
Chapter, when an instrument is presented to the register of deeds for registration by an individual 15
who is not a trusted submitter, the register of deeds shall require the person presenting the 16
instrument to produce identity verification as follows: 17
(1) If an individual who is not a trusted submitter presents an instrument to the 18
register of deeds for registration in person, the register of deeds shall require 19
the individual to produc e a government -issued photographic identification 20
card for inspection by the register of deeds before registering the instrument. 21
The register of deeds must record the name , address, identification card 22
number, and expiration date as the information appears on the identification 23
card, in a record to be kept by the register of deeds, along with the official 24
records book and page n umber or instrum ent number of the instrument 25
registered in connection to the production of the identification card. Such a 26
record may not be made available for viewing on the register of deeds' official 27
public website but shall be made available for public inspection and copying 28
as required by the public records laws of this State. 29
(1a) If an individual who is not a trusted su bmitter presents an instrument to the 30
register of deeds by U.S. mail, overnight delivery, or other paid third -party 31
delivery service, the register of deeds shall require the individual to submit a 32
photocopy of his or her government -issued photographic identification card 33
before registering the instrument. The register of deeds must note on the 34
photocopy of the identification card the official records book and page number 35
or instrument number assigned to the instrument registered in connection to 36
the submission of the photocopy of the identification card and retain the 37
photocopy of such identification card in a record to be kept by the register of 38
deeds. Such a record may not be made available for viewing on the register of 39
deeds' official public website but shall be made available for public inspection 40
and copying as required by the public records laws of this State. However, a 41
person who submits a photo copy of his or her government -issued 42
photographic identification card under this subsection may redact from the 43
photocopy of such identification card before submission all of the information 44
he or she does not wish to be made public, except for his or her name, address, 45
photograph, identification card number, and expiration date. 46
(2) If a n individual who is not a trusted submitte r as defined in this section 47
presents an instrument in the form of an electronic document , as defined in 48
G.S. 47-16.3(2), to the register of deeds, as provided by Article 1A of Chapter 49
47 of the General Statutes, the register of deeds shall require the individual to 50
submit a photocopy of his or her government-issued photographic 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 535-Second Edition
identification card before registering the instrument. The register of deeds 1
must note on the photocopy of the identification card the official records book 2
and page number or instrument number assigned to the instrument registered 3
in connection to the submission of the photocopy of the identification card and 4
retain the photocopy of such identification card in a record to be kept by the 5
register of deeds. Such a record may not be made available for viewing on the 6
register of deeds' official public website but shall be made available for public 7
inspection and copying as required by the public records laws of this State . 8
However, a person who submits a photocopy of his or her government-issued 9
photographic identification card under this subsection may redact from the 10
photocopy of such identification card before submission all of the information 11
he or she does not wish to be made public, except for his or her name, address, 12
photograph, identification card number, and expiration date. 13
(c) Refusing to Register. – Notwithstanding any other provision to the contrary in this 14
Chapter, the register of deeds shall refuse to register an instrument if one of the following occurs: 15
(1) The register of deeds deems the instrument presented for registrat ion a 16
suspicious instrument under subdivision (2) of subsection (a) of this section. 17
(2) The individual presenting the instrument for registration is not a trusted 18
submitter, and the name on the government-issued photographic identification 19
card presented by the individual pursuant to subsection (b) of this section does 20
not match the name of the grantor or conveying party in the instrument 21
presented for registration. 22
(d) Additional Actions for Suspicious Instruments. – Upon finding that an instrument 23
presented for registration is a suspicious instrument under sub division (2) of subsection (a) of 24
this section, the register of deeds may report the suspicious instrument to an appropriate law 25
enforcement agency. 26
(e) Notice of Requirements. – The register of deeds shall provide notice of the identi ty 27
verification requirement described in subsection (b) of this section on the register of deeds ' 28
official public website. 29
(f) Legal Protections and Remedies. –There is no right or cause of action against, and no 30
civil liability on the part of the register of deeds or the county with respect to the register of deeds' 31
requirement of a government-issued photographic identification card, or any refusal to register 32
an instrument as allowed by subsections (b) and (c) of this section. 33
(g) Confidentiality. – Nothing in this section shall be construed to require the register of 34
deeds to provide or allow access to a record or other information that is considered confidential 35
information as defined by G.S. 132-1.2." 36
SECTION 2.2. Section 2.1 of this act becomes effective October 1, 2025, and applies 37
to instruments presented for registration on or after that date. 38
SECTION 3.1. The Legislative Research Commission (LRC) shall study the 39
feasibility of creating a fraud detection alert system where everyone who submits an instrument 40
as defined in G.S. 161-32 for registration is automatically enrolled in the fraud detection alert 41
system without paying a fee. Before enrollment, the register of deeds would provide each 42
individual with a notice explaining the system – its purpose, how it works, and how to opt out of 43
enrollment. 44
As part of its study, the LRC shall do all of the following: 45
(1) Evaluate the practicality of implementing a fraud detection alert system with 46
automatic enrollment and an opt -out option, including technological and 47
staffing requirements for registers of deeds across all counties. 48
(2) Examine the fiscal impact on the State, counties, and/or registers of deeds, 49
including costs associated with developing, maintaining, and operating a fraud 50
detection alert system without charging a fee to the participant. 51
General Assembly Of North Carolina Session 2025
House Bill 535-Second Edition Page 5
(3) Evaluate how well such a fraud detection alert system would prevent fraud as 1
compared to other potential systems or measures. 2
SECTION 3.2. The LRC shall report its findings, together with any propo sed 3
legislation, to the 2026 Regular Session of the 2025 General Assembly upon its convening. 4
SECTION 3.3. Sections 3.1 and 3.2 of this act are effective when they become law. 5
SECTION 4.1. Article 1 of Chapter 41 of the General Statutes is amended by adding 6
a new section to read: 7
"§ 41-10.2. Fraudulent instrument procedure. 8
(a) As used in this section, the term "instrument" means any of the following: 9
(1) A transfer of title to real property by deed or devise or other instrument 10
transferring title to real property. 11
(2) A deed of trust, mortgage, judgment, lien, encumbrance, financing statement, 12
affidavit, notice, memorandum, or any other instrument that establishes a 13
security interest in real property. 14
(3) A contract, right of refusal, lease, affidavit, memorandum, or any other 15
instrument that purports to establish an interest, option, encumbrance, right, 16
or any other claim relating to or interest in real property. 17
(b) The actual owner of an interest in real property subject to a recorded false, fictitious, 18
or fraudulent instrument may file a civil action and proceed pro se, without the assistance of legal 19
counsel. The district court division of the General Court of Justice shall have original jurisdiction 20
over actions instituted under this section, and a party may seek emergency relief under this 21
section by filing a civil action in district court alleging the filing or recording of a false, fictitious, 22
or fraudulent instrument in a public record or a private record generally available to the public. 23
Upon the filing of any action under this section, the plaintiff shall file a notice of lis pendens. 24
Required service of process or notice required by Rules 4 and 5 of the North Carolina Rules of 25
Civil Procedure on any party shall be sufficient if made to the party's address reflected on the 26
face of the suspicious instrument, the address for mailing tax bills for the parcel of land, or 27
reflected on the summons or other court filings. If an ex parte hearing is requested, and, upon the 28
submission of a sworn statement and evidence supporting the allegation of the recordation of a 29
false, fictitious, or fraudulent instrument, a temporary order , declaring the recording to be 30
fraudulent, shall be entered if the court finds that there is no statutory, contractual, or other legal 31
basis for the alleged false, fictitious, or fraudulent recording. A temporary order entered under 32
this subsection shall remain in effect for the later of 60 days or until the entry of a permanent 33
order. The chief district court judge may authorize a magistrate or magistrates to hear any motions 34
for emergency relief ex parte under this section. The clerk of superior court shall schedule an ex 35
parte hearing with the di strict court division of the General Court of Justice within 72 hours of 36
the filing for said relief, or by the end of the next day on which the district court is in session in 37
the county in which the action was filed, whichever shall first occur. If the district court is not in 38
session in said county, the party may contact the clerk of superior court in any other county within 39
the same judicial district who shall schedule an ex parte hearing with the district court division 40
of the General Court of Justice b y the end of the next day on which said court division is in 41
session in that county. Upon the issuance of an ex parte order under this subsection, a hearing 42
shall be held within 10 calendar days from the date of issuance of the order or within seven 43
calendar days from the date of service of process on the other party, whichever occurs later. A 44
continuance shall be limited to one extension of no more than 10 calendar days unless all parties 45
consent or good cause is shown. The hearing shall have priorit y on the court calendar. If, after 46
an opportunity to be heard to all interested persons and all persons claiming an ownership interest 47
in the property, the court finds that there is no statutory, contractual, or other legal basis for the 48
recording, the cou rt shall enter a permanent order finding that the recorded instrument is false 49
and is void as a matter of law. The court may also include in the order any of the following types 50
of relief: 51
General Assembly Of North Carolina Session 2025
Page 6 House Bill 535-Second Edition
(1) Grant to a prevailing party possession of the real property and order the 1
ejectment of any party on the premises. 2
(2) Award to the prevailing party attorneys' fees and other costs for the action. 3
(3) Stay any proceedings involving the subject real property in which the property 4
owner is not a party to. 5
(4) Upon a finding by the court that an action filed under this section is frivolous 6
or malicious, assess a civil penalty of not more than ten thousand dollars 7
($10,000), of which the clear proceeds assessed under this subdivision shall 8
be remitted to the Civi l Penalty and Forfeiture Fund in accordance with 9
G.S. 115C-457.2. 10
(5) Upon a finding by the court that a party has presented for filing or recording 11
a false, fictitious, or fraudulent instrument as described in this section more 12
than once, enter a pre-filing permanent injunction against the party. 13
(6) Enjoin a party from listing the real property for sale, lease, or any other similar 14
advertisement. 15
(7) Impose sanctions against the offending party or their attorney pursuant to Rule 16
11 of the North Carolina Rules of Civil Procedure. 17
(8) Order execution of any additional instruments necessary or required to clear 18
the title to the property pursuant to Rule 70 of the North Carolina Rules of 19
Civil Procedure. 20
(c) Upon being presented with an ex parte or a permanent order duly issued by a court of 21
competent jurisdiction of this State declaring that a recorded instrument is false and void as a 22
matter of law, the register of deeds that received the false recording shall record and cross-index 23
the order and shall, in addition to recording the court's order, also conspicuously mark on the first 24
page of the previously recorded instrument the following statement: "THE CLAIM ASSERTED 25
IN THIS DOCUMENT IS FALSE AND IS NOT PROVIDED FOR BY THE GENERAL LAWS 26
OF THIS STATE." An order presented for recording pursuant to this section shall be recorded 27
and cross-indexed by the register of deeds as a subsequent instrument under G.S. 161-14.1, and 28
no fee authorized under G.S. 161-10, or otherwise, shall be charged. 29
(d) In addition to any criminal penalties or other civil remedies provided by law, the 30
presentation of an instrument for recording with a register of deeds that purports to be an 31
instrument that is determined to be materially false, fictitious, or fraudulent shall constitute a 32
violation of G.S. 75-1.1. 33
(e) A person who initiates an action under this section knowing that the subject 34
instrument is not false, fictitious, or fraudulent shall be punished as a Class G felon. 35
(f) If a party appeals the district court's decision, the appeal shall be to the superior court. 36
The notice of appeal must contain a verified factual explanation as to why the order entered is 37
incorrect." 38
SECTION 4.2. Section 4.1 of this act becomes effective October 1, 2025, and applies 39
to causes of action filed on or after that date. 40
SECTION 5.1. The Administrative Office of the Courts shall develop a form 41
complaint for the fraudulent instrument procedure established by Section 4.1 of this act and have 42
the form available on its website no later than October 1, 2025. In addition to the requirements 43
set forth in this section, the form shall include clear language notifying the filing party that 44
providing false information or statements is perjury pursuant to G.S. 14-209 and punishable as a 45
Class F felony. 46
SECTION 5.2. The Administrative Office of the Courts shall develop a form for 47
filing a lis pendens established by Section 4.1 of this act and have the form available on it s 48
website no later than October 1, 2025. 49
SECTION 5.3. Sections 5.1 and 5.2 of this act are effective when they become law. 50
General Assembly Of North Carolina Session 2025
House Bill 535-Second Edition Page 7
SECTION 6.1. Article 4 of Chapter 47 of the General Statutes is amended by adding 1
a new section to read: 2
"§ 47-108.30. No presumption of priority for certain recorded instruments. 3
An instrument as defined in G.S. 161-32 shall not have a presumption of priority based upon 4
the time of registration and shall not constitute constructive notice or color of title if any of the 5
following apply: 6
(1) The instrument does not comply with the provisions of G.S. 47-18, 47 -20, 7
47-118, 47-119, 47-119.1, or 47-120, as applicable. 8
(2) The instrument does not contain a signature and acknowledgement duly 9
acknowledged before an officer authorized to perform acknowledgements as 10
required for recording of at least one record owner at the time the conveyance 11
is made." 12
SECTION 6.2. Article 2 of Chapter 47 of the General Statutes is amended by adding 13
a new section to read: 14
"§ 47-18.4. Source of title required for registration. 15
Notwithstanding any other provision to the contrary in this Chapter, a ll deeds or other 16
conveyances of title (other than by court order) presented for registration must include a source 17
of title to the grantor. Source of title may include the prior deed transferring title to the current 18
grantor by reference to the book and page and the name of the grantee identified in that document, 19
a duly probated will and estate file number with the clerk of superior court, recital of the chain 20
of inheritance in the case of intestate succession, or a court order and court file number vesting 21
title in the grantor. If a deed or other conveyance of title (other than a court order) is submitted 22
for registration by anyone other than a "trusted submitter" as defined in G.S. 161-32, the register 23
of deeds shall not accept the conveyance for registration unless one of the following applies: 24
(1) The submitter provides a certified copy of the latest county tax listing or bill 25
reflecting the owner on the certified tax listing matches the grantor in the 26
document presented for registration. 27
(2) The county officer who manages tax listings certifie s that the grantor on the 28
document presented for registration is consistent with the owner reflected on 29
the tax listing for the real property. 30
(3) In the event of a material inconsistency in the grantor's identity reflected on 31
the document presented for registration and the county tax records , the 32
document presented for registration shall not be recorded until legal 33
verification of the source of title of the grantor reflected on the document 34
presented for registration has been provided by one of the following methods: 35
a. The county officer who manages tax listings determine s that the 36
grantor reflected in the document presented for registration should be 37
included as an owner in the tax listing for the real property. 38
b. A North Carolina licensed attorney provides a title certification of the 39
grantor listed in the document presented for registration." 40
SECTION 6.3. Section 6.1 and Section 6.2 of this act are effective October 1, 2025, 41
and apply to deeds or other conveyances of title (other than by court order) presented for 42
registration on or after that date. 43
SECTION 7.1. G.S. 161-31 reads as rewritten: 44
"§ 161-31. Tax certification. 45
(a) Tax Certification. – The board of commissioners of a county may, by resolution, 46
require the The register of deeds shall not to accept any deed transferring rea l property for 47
registration unless the county tax collector has certified the name of all owners of the parcel listed 48
in the tax records and that no delinquent ad valorem county taxes, ad valorem municipal taxes, 49
or other taxes with which the collector is charged are a lien on the property described in the deed. 50
The county commissioners may describe the form the certification must take in its resolution. 51
General Assembly Of North Carolina Session 2025
Page 8 House Bill 535-Second Edition
(a1) Exception to Tax Certification. – If a board of county commissioners adopts a 1
resolution pursuant to subsection (a) of this section, notwithstanding the resolution, the The 2
register of deeds shall accept without certification a deed submitted for registration by a trusted 3
submitter as defi ned in G.S. 161-32 containing this statement on the deed: "This instrument 4
prepared by: ________, a licensed North Carolina attorney. Delinquent taxes, As closing 5
attorney, I certify that delinquent and current taxes owed, if any, to will be paid by the closing 6
attorney by my office to the county tax collector upon disbursement of closing proceeds." 7
(b) Applicability. – This section applies only to Alamance, Alexander, Anson, Beaufort, 8
Bertie, Bladen, Brunswick, Buncombe, Burke, Cabarrus, Caldwell, Camden, Carteret, Caswell, 9
Catawba, Cherokee, Chowan, Clay, Cleveland, Columbus, Currituck, Dare, Davidson, Davie, 10
Duplin, Durham, Edgecombe, Forsyth, Franklin, Gaston, Gates, Graham, Granville, Greene, 11
Halifax, Harnett, Haywood, Henderson, Hertford, Hoke, Hyde, Iredell, Jackson, Johnston, Jones, 12
Lee, Lenoir, Lincoln, Macon, Madison, Martin, McDowell, Montgomery, Nash, Northampton, 13
Onslow, Pasquotank, Pender, Perquimans, Person, Pitt, Polk, Randolph, Robeson, Rockingham, 14
Rowan, Rutherford, Sampson, Scotlan d, Stanly, Stokes, Surry, Swain, Transylvania, Tyrrell, 15
Vance, Warren, Washington, Wayne, Wilson, Yadkin, and Yancey Counties." 16
SECTION 7.2. Section 7.1 of this act becomes effective October 1, 2025. 17
SECTION 8. Except as otherwise provided, this act is effective when it becomes 18
law. 19