By Michaelle Bond
The Philadelphia Inquirer
(TNS)<\/p>\n
Dec. 3 \u2014 City officials and housing advocates want\u00a0Philadelphia\u00a0to close a loophole in its tax code that allows people who forge deeds and steal homes to get a refund for taxes they paid to commit their crimes.<\/p>\n
Thieves commit deed fraud when they illegally transfer a property\u2019s ownership and record a fraudulent deed with the city.<\/p>\n
This fraud often occurs after a homeowner dies but remains the legal owner of a property. Thieves use deceptive means, such as posing as fake heirs and forging documents, to take and sell properties, often flipping them to developers for large profits.<\/p>\n
To record a deed, property owners\u2014including fraudsters\u2014need to pay a realty transfer tax. If a judge later determines that a sale was fraudulent, the person who paid the tax can request a refund from the city. That includes thieves.<\/p>\n
A bill introduced by City Council Majority Leader\u00a0Katherine Gilmore Richardson\u00a0would allow the city to give refund money to deed fraud victims, who can spend thousands of dollars fighting to regain ownership of their properties.<\/p>\n
\u201cIt\u2019s a nightmare for victims of deed fraud, and while we can\u2019t necessarily improve the situation, we can help to ease some of their financial burden,\u201d\u00a0Gilmore Richardson\u00a0said during a Council hearing Wednesday.<\/p>\n
Philadelphia\u2019s\u00a0portion of the realty transfer tax is 3.578% of the value of a home sold. So for a stolen $100,000 home, a victim could receive a refund of about $3,500.<\/p>\n
A longstanding issue<\/p>\n
Deed fraud is a persistent problem in\u00a0Philadelphia. The city\u2019s records department received about 130 reports of deed fraud in 2023 and about 110 reports in 2024.<\/p>\n
Investigations by The Inquirer have shown that deed theft grew alongside gentrification in Philadelphia, as property values rose in neighborhoods that became more desirable. Victims of deed fraud disproportionately are people of color and seniors.<\/p>\n
City officials earlier this year launched a system that checks whether a home seller is dead in order to prevent deed thieves from stealing homes legally owned by dead people.\u00a0Philadelphia\u00a0was the first local government to roll out such a system, according to Mayor\u00a0Cherelle L. Parker.<\/p>\n
James Leonard, commissioner of the\u00a0Philadelphia Department of Records, said the Parker administration supports the Council bill, which \u201caddresses a gap in how we help victims of deed fraud.\u201d<\/p>\n
\u201cWe see these cases regularly,\u201d he said. \u201cThey devastate families, they undermine confidence in our property system, and they impose significant costs on victims, who must fight in court to reclaim what was always rightfully theirs.\u201d<\/p>\n
Victims face a long legal battle in which they must prove that a deed is fraudulent and often must pay attorney fees. And they have to keep paying mortgages while they fight to reclaim properties.<\/p>\n
\u201cWhen they finally win, they get their property back. But they\u2019re often financially and emotionally devastated by the process,\u201d Leonard said.<\/p>\n
The new Council legislation allows a victim who gets a court order that voids a fraudulent deed to request a refund of the realty transfer taxes that a thief paid. Leonard estimates the city will see at most 25 to 50 cases per year, a \u201cmodest\u201d fiscal impact for the city.<\/p>\n
And under current law, the city keeps tax payments that it never would have received if not for the deed fraud, he said, so the city has been benefiting from fraudsters\u2019 payments.<\/p>\n
\u201cFrom an equity standpoint, this bill is the right thing to do,\u201d he said.<\/p>\n
Vincent Gilliam\u00a0and his family were victims of deed fraud when his deceased mother\u2019s home in\u00a0North Philadelphia\u00a0was stolen. Between the belongings that deed thieves took and the fight to reclaim the home, he estimates that the ordeal cost his family at least $5,000.<\/p>\n
He told Council members that getting some money back from the city through a realty transfer tax refund \u201cwould be a tremendous help.\u201d<\/p>\n
Kate Dugan, a divisional supervising attorney at the legal aid nonprofit\u00a0Community Legal Services of Philadelphia, said the problem of deed theft \u201cis expensive and complicated to fix.\u201d<\/p>\n
\u201cEven when free representation is available, which is normally not the case, victims are stuck paying for costs like repairs, changing locks, filing fees \u2026 out of their own pockets,\u201d she said. \u201cIt\u2019s rare for a deed fraud victim to collect any meaningful money damages or restitution.\u201d<\/p>\n
On Wednesday, Council\u2019s\u00a0Finance Committee\u00a0sent the bill to the full Council for consideration.<\/p>\n
Photo caption: Philadelphia City Hall (f11photo\/iStock)<\/p>\n
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