In a recent episode of the Taking Care of Tutu podcast, Meg spoke with Pam Teal, an Escrow
Officer at Fidelity National Title & Escrow, about two important topics for Hawaii property
owners:
- What escrow actually does
- The growing risk of deed fraud
If you own property in Hawaii — especially vacant land, mortgage-free property, or family land
held for generations — this is worth understanding.
What Does Escrow Do?
Escrow is a neutral third party in a real estate transaction. Its role is to make sure everything
happens correctly and safely.
An escrow company:
- Holds the buyer’s funds securely
- Follows written instructions agreed to by buyer and seller
- Coordinates signing of documents
- Ensures documents are properly recorded
- Works with title to confirm ownership transfers correctly
In the past, real estate transactions sometimes involved exchanging checks and paperwork
directly between parties. That created risk. Today, escrow protects both sides by holding funds
until all conditions are met and the transaction is ready to close.
Escrow works closely with title companies, which review the “chain of title” — the recorded
history of ownership — to confirm that the seller truly has the right to sell the property.
That process becomes especially important when we talk about fraud.
A Rising Concern: Deed Fraud
Deed fraud — sometimes called title theft — happens when someone records a fraudulent deed
transferring ownership without the real owner’s knowledge.
This can involve:
- Forged signatures
- Fake identification
- Dishonest notaries
- Recording documents directly with the Bureau of Conveyances
And yes — it is happening in Hawaii.
Why Certain Properties Are Targeted
Fraudsters often look for properties that are:
- Free and clear (no mortgage lender monitoring activity)
- Vacant land
- Owned by elderly individuals
- Owned by mainland or foreign residents
If there’s no mortgage, there’s no bank watching. If the land is vacant, no one may be physically
present. That creates opportunity.
It surprises many people to learn that the Bureau of Conveyances records documents but does
not independently verify whether a deed is legitimate. That means a fraudulent deed can be
recorded without the true owner knowing.
How Do Victims Discover It?
Sometimes in the most unsettling way possible.
In certain cases, the first sign of fraud is someone knocking on the door claiming to be the new
owner. The fraudster may have a recorded deed in hand. The true owner is left shocked — and
forced to hire an attorney to sort it out.
In other situations, the fraudster’s goal is speed. They record a fraudulent deed and then try to
quickly “flip” the property.
One red flag: dramatic price reductions.
Pam shared an example of vacant land previously listed for $1.2 million. A year later, another
agent was contacted by someone claiming to be the seller — now offering it for $750,000. The
steep discount raised suspicion. Fortunately, the agent called the real owner and stopped the
fraud before closing.
Deep discounts and urgency are common tactics.
How Escrow and Title Help Prevent Fraud
If a fraudster attempts to sell property through escrow, the title review process often reveals
problems.
Escrow and title professionals may notice:
- Unexplained recent transfers
- Inconsistent identification
- Missing supporting documentation
- Irregular signing circumstances
Additional affidavits or verification may be required. Those extra layers of review frequently
prevent fraudulent transactions from closing.
While no system is perfect, the involvement of title and escrow adds significant protection.
Elder Abuse and Family Risks
Not all deed fraud is committed by strangers.
Sometimes the risk comes from within the family — misuse of a power of attorney, pressure
placed on an elderly parent, or attempts to transfer property when someone lacks mental
capacity.
Notaries and escrow officers have a legal obligation to ensure that a signer:
- Understands what they are signing
- Is signing voluntarily
- Has capacity to sign
If someone cannot answer basic questions or clearly demonstrate understanding, they should not
be signing a deed.
Yes, it can complicate things. If someone lacks capacity, families may need to pursue a court
conservatorship. That takes time. But bypassing safeguards can lead to far greater legal and
financial consequences.
What Can Property Owners Do?
There are practical steps you can take:
- Sign Up for Property Recording Alerts
The State of Hawaii allows owners to receive notifications when documents are recorded on their
property. These alerts happen after recording — but they allow you to act quickly. - Monitor Online Listings
Fraudsters often list properties on the MLS. Setting up online alerts for your address can help
you catch suspicious activity. - Be Cautious of Unusual Communications
Strange email addresses, rushed timelines, or pressure tactics are red flags. - Trust Your Instincts
If something feels off, ask questions. Protecting your home or family land is more important than
worrying about offending someone.
The Bottom Line
As Hawaii property values rise, fraud attempts may increase. Vacant land and mortgage-free
properties can be especially vulnerable.
Escrow and title professionals serve as important gatekeepers — but property owners must also
stay vigilant.
Protecting Tutu — and protecting family land — starts with awareness.
Resources
Property Watch Registration (BOC Link)
Property Watch – BOC Post
Google Alerts
