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Notary Tells Ways to Avoid Contract Scams

May 15, 1994

The series on the pitfalls of re-roofing ("Top Secrets," "In Over Your Head?") was a valuable public service.

It should be brought to the attention of your readers that roofing rip-offs are but one of a panoply of home-improvement scams that homeowners should guard against. In the most pernicious of these frauds, the homeowner will be tricked into signing a contract that places a lien on the property and could result in loss of the home. The clause with the lien may not have been read because it was folded under the salesman's clipboard.

Sometimes an unscrupulous contractor will ask the homeowner to sign an estimate that turns out to be a deed of trust. This deed will then be "notarized" out of the presence of the signer, a serious violation of law.

On behalf of the National Notary Assn., a nonprofit educational organization serving the nation's 4.5 million notaries, I would like to offer your readers some pointers to avoid such scams:

--It's best not to sign any estimate or contract in the presence of the contractor or salesperson, especially if pressure is being applied. Insist that the document be left overnight so that you can study it. If you can't understand the document, don't sign it.

--If anyone tries to sell you anything in your home that costs $25 or more, you have three days after signing to change your mind. But there is no three-day protection if you had sought out the seller and arranged the purchase at his place of business. If you want to get out of a deal before three days, take a witness with you to the seller's place of business.

--Avoid whenever possible using the home as collateral for repairs. Remember that a lien may only be created on objects permanently affixed to the property. No lien may be taken on such removables as water filters, satellite dishes, drapes and carpeting.

Unfortunately, these precautions are of no use in the cruel scams in which, without the presence or knowledge of the homeowner, phony deeds are created, forged and notarized using a stolen or counterfeit notary seal. Such bogus deeds may be sold or used as collateral for a loan that the con artist has no intention of repaying. As a result, the homeowner may lose the property or have to pay thousands of dollars in legal fees to recover its title.

State Sen. Diane Watson has authored legislation that now requires signers of deeds for property in Los Angeles County to leave a right thumbprint in the notary's journal. This simplifies the victimized homeowner's task in clearing title.

Another part of that legislation is just now being implemented: The Los Angeles County recorder will start informing property owners of any deeds or liens filed affecting their property. This will prevent tragedies in which the homeowner learns about a phony deed on the very eve of foreclosure.

However, the fingerprinting requirement is only a three-year pilot program that will end on Dec. 31, 1995. Every homeowner should urge the Legislature to make this valuable program permanent and statewide. Further, if the Legislature requires not only the notary's journal but also the deed itself to bear the signer's fingerprint, countless frauds would be prevented or readily revealed.

CHARLES N. FAERBER

Vice President

National Notary Assn.

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