Senate committee adopts amendment and advances bill aimed at deterring deed fraud

Senator Clark presented Senate Bill 406 to a Senate committee during a committee meeting, and members adopted an amendment before voting to advance the bill out of committee.

The measure, as explained by supporters, is aimed at reducing property deed fraud, including so-called seller-impersonation schemes in which a bad actor forges a deed to transfer or sell property they do not own. Senator Clark said the bill is intended to improve “title security” and help prevent titles from being stolen.

The amendment adopted clarifies who counts as the listed grantor for identification purposes — explicitly encompassing trustees of a trust, a member of an LLC, a president of a corporation or an attorney-in-fact acting under a power of attorney — and removes the practice of recording a copy of a grantor’s driver’s license in the public deed record. Under the amendment, the circuit clerk will keep the driver’s license on file “under seal,” and the license will not be visible in the recorded instrument.

Micah Bono Sample, identifying himself as “the Celine County Circuit Clerk’s Office” and speaking for the circuit clerk association, told the committee the association supports the bill and its amendments as a step to deter fraudulent recordings. Kyle Sylvester, Washington County Circuit Clerk and legislative chair for the Arkansas Circuit Clerk Association, said the bill “gives us a head start” by requiring identification to be kept on file, which provides a place for investigators to begin if a recorded deed proves fraudulent.

Paul Hayes, who identified himself as a private citizen and said he had been a victim or had closely studied property-theft cases, testified that the current version of the bill does not go far enough. Hayes urged restoring a provision from an earlier draft that would let property owners file a freeze at the clerk’s office so transfers could be completed only in person; he suggested a fee-based model (he cited possible fees of $100, $50 for certain seniors or disabled people, and $250 for properties where the owner does not reside) as a deterrent to thieves. Hayes said, in part, “Anybody who can forge title documents can forge driver’s licenses…making a copy of a driver's license and stick it in the file may give you a warm fuzzy feeling, but it doesn't prevent diddly squat.”

Committee members and witnesses also described other steps some clerks are piloting, including property-fraud alert programs and software to detect fraudulent notary stamps. Senator Clark and other committee members said the bill is a start and that further legislation may follow as fraud techniques evolve.

The committee adopted the amendment and then voted to pass the bill as amended. The transcript records the committee chair calling the voice vote and members answering “aye.”

The bill had previously been filed in an earlier form (referred to in testimony as SB 69) and drew significant negotiation among title companies, circuit clerks and realtors before the current amendment was drafted.

Votes/Actions: The committee adopted the amendment to SB 406 (voice vote) and subsequently voted to advance SB 406 as amended (voice vote).