From legislation to action: Get ahead of California’s fraud notification requirement

The quiet, often overlooked crime of real estate fraud has exploded across the United States, stealing homes, depleting equity, and overwhelming local jurisdictions. In California, where property values are among the highest in the nation, this threat is particularly acute. The state legislature has responded with a clear, non-negotiable directive: Senate Bill 255 (SB 255).

Signed into law in October 2025, SB 255 adds Section 27297.7 to the Government Code, mandating that every county in California must establish a Recorder Notification Program by January 1, 2027. This is not a suggestion; it is a statutory requirement with significant operational implications. Building this program from scratch represents a monumental challenge for county recorder offices and administrative boards.

Cotality’s Real Estate Fraud Notification (REFN) solution is not just an aid; it is a comprehensive, pre-built, and proven platform that ensures immediate and complete compliance with SB 255, transforming the county's role from passive record-keeper to proactive community defender.

Understanding the SB 255 mandate

The intent of SB 255 is straightforward: to provide homeowners with an early warning system against fraudulent activity. To meet the January 1, 2027, deadline, each county's program must fulfill three core functions:

1. Universal monitoring: The system must continuously monitor all new recordings (such as deeds, liens, and deeds of trust) for transactions related to existing properties.
2. Prompt notification: The program must promptly alert the registered property owners when any transaction related to their property is executed.
3. Documentation support: The notification must include the necessary information and copies of the recorded document to allow homeowners to assess the action and report fraud to local authorities.

Failure to adopt an effective, scalable solution by the deadline creates significant legal and administrative risk for the county. The urgency is compounded by the sheer volume of daily transactions that must be reliably screened.

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The challenge

Real estate fraud relies on speed and obscurity. Criminals often record fraudulent deeds late in the day or just before a weekend, hoping to gain time before the real property owner notices the change. Traditional county systems face several structural challenges in countering this:

• Transaction volume: Large urban counties process thousands of property recordings weekly, making manual or semi-automated verification impossible.
• Data integrity: Legacy systems may contain inconsistent or outdated mailing addresses, leading to delayed or failed notifications.
• Lack of context: Traditional systems record the deed filing but lack the context to flag the suspicious nature of the transaction.

To solve this, a county needs a platform that moves at the speed of fraud, which is where Cotality’s technology steps in.

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Cotality’s REFN solution

The Real Estate Fraud Notification (REFN) solution is a definitive technological answer to the requirements of SB 255, built on a foundation of unmatched data and powerful artificial intelligence.

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Leverage unmatched property intelligence

The foundation of REFN’s accuracy is its data scope. The system leverages databases covering more than 99.99% of all properties in the U.S. This intelligence is crucial because it allows the system to:

• Verify identity: Confirm the legitimacy of both the property and the current ownership details against a trusted archive collected from thousands of diverse sources.
• Establish baselines: Provide an exhaustive historical record for every property, making any sudden, anomalous change instantly noticeable.

This robust data backbone ensures that the notification program mandated by SB 255 is both comprehensive and highly accurate.

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CoreAI-powered automation and fraud detection

The CoreAI-powered service provides the operational muscle to handle the sheer volume of California transactions required for compliance.

• Continuous monitoring: New property recordings in your jurisdiction are monitored in near real-time.
• Anomalous activity detection: The CoreAI engine immediately compares the new activity against our vast property archives. Any activity or discrepancy can trigger an alert to homeowners.
• Customizable notifications: To fit the specific needs of each county, the system allows for the customization of the fraud solution. This capability ensures the program is targeted and efficient.

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Protecting time and records

For District Attorneys and County Recorders, time is the scarcest resource. REFN monitors, notifies, and documents on their behalf, offering a critical operational advantage:

• The automation allows fraud units to step away from administrative tasks and focus on what matters most, investigating real estate fraud and prosecuting the criminals.
• The system promptly alerts property owners and supplies copies to both homeowners and District Attorney offices, providing immediate, verifiable evidence that significantly aids prosecutors in investigations.

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A solution for today's risk and tomorrow's law

SB 255 is a necessary response to a rapidly growing criminal threat. By adopting Cotality’s Real Estate Fraud Notification solution, California counties gain a decisive advantage. They not only guarantee compliance before the January 1, 2027, deadline but also establish a proactive defense that protects the financial security of their citizens and equips their law enforcement with the tools necessary to fight sophisticated organized fraud.

Protect your county's records and your citizens' equity, ‍contact Cotality for a demo!