The TIRSA Owner’s Extended Protection Policy (TOEPP) in New York is distinguishable from the standard American Land Title Association (ALTA) policy in that, in certain circumstances, it affords coverage for situations arising post-closing that the standard ALTA policy does not. For example, post-closing situations covered under TOEPP may include, but are not limited to: a neighbor’s claim to use part of the insured’s premises based on a continuous use over time (easement by prescription); a neighbor builds a structure, other than a boundary wall or fence, that encroaches onto the insured’s land; and supplemental taxes not previously assessed for a period before the effective date of the title policy. Without taking away from the importance of the coverages described above, or any of the other items covered under TOEPP, this article will examine a very specific instance that may be covered under TOEPP: when a party claims an interest in the insured’s land due to an unrecorded instrument that was forged post-closing.

Covered Risk 3 under the TOEPP gives coverage when “someone else claims to have rights affecting Your Title arising out of forgery or impersonation.”¹ Perhaps the most obvious example of this is Deed theft, which seemingly has become more frequent across the country. Deed theft, in its simplest form, involves a fraudster forging an owner’s signature and notary on a Deed and then having it recorded with the local County Clerk’s Office. The process of having the forged Deed removed from the Clerk’s records is daunting and in most cases, expensive…very expensive. In most cases of Deed theft, the fraudster will seek to obtain financing and, if successful, the rightful owner will not only have the forged Deed to deal with but also now a lien in the amount of the sham mortgage that the fraudster made away with.

Forgery has been seen in high profile cases, on both a national and local level. Last year, an auction for Graceland Mansion, Elvis Presley’s former home turned museum, was put on hold due to claims of fraud by Elvis’ living heirs. The heirs filed a lawsuit against the lender auctioneer claiming that a collateral Deed that was supposedly signed over to them by Elvis’ daughter, Lisa Marie Presley, and the notary on that Deed were forged.² The auctioneer withdrew all claims to the estate soon after the Court stepped in on the pending auction.³ However, the auctioneer was only days away from selling a mansion they never had an interest in.

A fraudulent Deed was able to make its way into the records of the New York City Register’s Office as recently as last year. On June 15, 2024 the New York Post reported that a Deed conveying air and subsurface rights to two high value parcels in Manhattan was recorded, conveying the rights to Hillary Clinton, Ivanka Trump and a Louis Reyes.⁴ Although the Department of Finance confirmed that the Deed was filed in error and subsequently removed, it is important to note it slipped through the cracks without even a notary or anyone questioning the Clinton/Trump alliance knowing the bitter political rivalry that exists. Would this Deed have gone unnoticed for longer if it did not involve high profile names or high value parcels?
Deed forgery is not limited to high profile properties, however. As recently as December 2024, two people were charged with submitting fake deeds to fraudulently convey properties in Mount Vernon⁵.

The above situations, while different in their own rights, had one common element: the documents purporting to convey the rights were attempted to be made and, except for in the Mount Vernon case, were eventually made a part of the public records. However, can rights or an interest in real property be stolen by a forged document not of record with a County Clerk? Let us consider the following scenario:

When it comes time for vacation, people will travel. Whether that means weekend trips to the beach or ski slopes, or longer getaways to foreign countries; an empty house is a golden opportunity for a squatter. Most instances of squatting seen today involve either holdover tenants or a trespasser that moves into an empty home and claims a right to live there when confronted. In the latter case, often times the squatter has a cable or electric bill in their name as proof of residency and law enforcement has their hands tied by local laws. 

What would happen, however, if someone forged a lease, moved into the premises, and when confronted, presents the lease as proof that they are a rightful tenant? Moreover, what if the tenant was an innocent party in that they did not forge the lease but were also conned into thinking the Landlord they are renting from is the actual owner? A lease can be a factor on whether law enforcement will allow a tenant to remain—and an allegedly forged lease may be sufficient to prevent either an innocent tenant or squatters from being evicted. 

Historically, without coverage for fraud or forgery occurring post-closing, the owner of the premises will have to come out of pocket to retain an attorney to defend against the unlawful possession, including initiating eviction proceedings, which are not just time consuming but also extremely costly. If, as contemplated above, a squatter moves in while a family is on vacation, the owner(s) may even need to find alternative living arrangements while the case is adjudicated.

Returning to the above discussion of Covered Risk 3 under TOEPP—coverage is provided when “Someone else claims to have rights affecting Your Title arising out of forgery or impersonation.” The language of the policy does not otherwise require that the forged document be made of record at the local County Clerk’s office. After conducting research and reaching out to Counsel at a few of the national title insurers, the writer is not aware of any factual patterns that have been tested in the courts under TOEPP coverage in line with a squatter or innocent tenant taking possession of property by way of a forged post-closing lease. Absent factual circumstances that may preclude coverage, and subject to policy deductibles, the duty to defend of the title company may kick in (company has the right to pay/negotiate or bring/defend an action). Although the time and headache of dealing with the situation cannot be reversed, at least the related financial loss for court fees, attorneys’ fees and other related expenses may be covered.

When thinking about your or your client’s next residential real estate purchase, consider the potential for title theft and balance the costs and benefits in securing peace of mind for post-closing situations. Being burdened with figuring out a path to evict tenants can be a daunting task for a non-practitioner leaving them overwhelmed and feeling hopeless. However, there may be a light at the end of the tunnel as it seems that there may actually be hope in TOEPP.

Endnotes

1. Title Insurance Rate Service Association, Inc., Title Insurance Rate Manual for NEW YORK STATE page  101 (Seventh Revision October 1, 2024)

2. Roeloffs, M.W. (2024) Graceland auction called off-the battle over Elvis Presley’s estate, explain, Forbes.Available at: https://www.forbes.com/sites/maryroeloffs/2024/05/22/graceland-foreclosure-auction-called-off-the-battle-over-elvis-presleys-estate-explained-riley-keough/ (Accessed: 29 July 2024)

3. Id.

4. Weiss, L. and Calder, R. (2024) Exclusive: NYC Register’s office duped into believing Ivanka Trump and Hillary Clinton partnered on $150M real estate deal, New York Post. Available at: https://nypost.com/2024/06/15/us-news/nyc-duped-into-filing-bogus-ivanka-trump-hillary-clinton-real-estate-deal/ (Accessed: 29 July 2024)

5. Bandler, J. (2024) Two Mount Vernon residents charged with deed fraud for allegedly trying to transfer homes, Rockland/Westchester Journal News. Available at: https://www.lohud.com/story/news/local/westchester/mount-vernon/2024/12/18/two-from-mount-vernon-ny-charged-with-deed-fraud-were-city-employees/77075797007/ (Accessed: 8 January 2025)