Brooklyn Councilman wants to restrict deeds access

A Brooklyn City Council member is working on legislation that would require property owners to be notified when their deeds are accessed through online city records, citing a growing threat of real estate fraud.

Councilman Erik Martin Dilan, a Brooklyn Democrat, said criminals were committing fraud by printing and altering deeds that are available online. He said property owners need to be safeguarded, and that the exact images of deeds are too easily accessible online.

“There needs to be a better mechanism to protect homeowners from fraud,” he told The Real Deal. The property owner “should get a notice back that someone is accessing their record, and it should say by whom,” he said.

The city Department of Finance Web site, known as ACRIS (Automated City Register Information System), maintains a database of deeds and other property records for Manhattan, Brooklyn, Queens and the Bronx going back to 1966. The site launched in 2003.

The site gets about 300,000 visitors per month, a Department of Finance spokesman said.

Robert Freeman, executive director for the state Department of State’s Committee On Open Government, said the system should not be changed.

“The kind of records that would be subject to the proposal have been available forever,” he said, adding, “and what would it cost the city to notify everybody whose deed was accessed? It seems to me that would be an administrative nightmare.”

Broker Herbert Kliegerman of North Brooklyn Realty said his company obtains public information from services such as PropertyShark.com. But when the company is serious about acquiring a property, he said the original deeds need to be read to verify the information.

“It is advantageous to see the actual physical instrument as opposed to relying on a synopsis from someone who could transpose or miss a name,” he said.

Dilan has yet to file legislation on the matter. He filed a legislative request, the first step in drafting legislation, with the Council’s legal staff in January.

Dilan said he is not opposed to keeping deeds on the city’s Department of Finance Web site “if we can find a way to keep them on and prevent fraud.” He said he was responding to a nearly four-fold increase in real estate fraud referrals to the Brooklyn district attorney’s office.

Richard Farrell, counsel for the Brooklyn DA’s Rackets Division, said referrals for real estate fraud had climbed steadily, from 23 cases in 2004 to 93 in 2007. Twelve have already been recorded this year.

Farrell said fraud could be committed using online deeds in a number of ways. For example, anyone could copy an online image of the deed and use computer software to change the owner’s name. That fake copy of the document could then be used to fraudulently apply for a home improvement mortgage.

Farrell said implementing Dilan’s ideas would be difficult, and questioned whether law enforcement authorities would be exempt from any owner-notification requirement.

Klara Madlin, president of the Manhattan Association of Realtors, said transparency in real estate was one reason foreigners invested in the United States.

But she said it was not essential to have the actual images of deeds online, as long as its information is posted.

Guilherme Roschke, a fellow at the Electronic Privacy Information Center in Washington, D.C., said if property owners learn how often their records are accessed, they could demand additional restrictions.

“It might lead people to want more privacy in deed records,” he said.