Proposed Amendment to Pending Legislation Would Make Inaccurate Liens a Felony

SB 112 would create a new statute on ramifications for claiming a fraudulent interest in property. It provides a person may not, with the intent of defrauding, file or cause to be filed for recording in the official records a document pertaining to property which the person knows contains a misrepresentation or material omission of fact. A violation would be a third degree felony. The bill specifically provides that construction liens would not fall under this law because such liens would continue to be governed by the fraudulent lien statute in the Construction Lien Law.

However, a proposed lengthy amendment recently surfaced that would make anybody who files, attempts to file, solicits or directs another to file or conspires to file any document in the public records pertaining to property knowing or having reason to know the document is false would be liable for a second or third degree felony. This amendment is problematic on a number of levels. First, it expands liability from someone intending to defraud to someone who knew or should have known the document is false, regardless of whether it’s actually fraudulent. Second, it increases the charge from a third degree felony for the first violation to a second degree felony for second or subsequent offenses. Third, the statute would cover not only the lienor, but also any lawyer or other person who advised or counseled the lienor pertaining to the lien. Finally, the exclusion of construction liens was removed, making construction liens subject to this law, thereby creating an inconsistent conflict between this law and the fraudulent lien statute, which imposes a significantly different standard of liability and ramifications for violation.

I’m not sure who’s behind this amendment, but you should keep a close eye on it and help do your part to defeat it.