If you work in title & escrow, you’ve probably come across a file that raises this situation: The seller wants everything handled remotely, pushes to close fast, and something about it just sits wrong. You couldn’t point to a rule that said stop. You just knew to look closer.
Virginia has now written some of that instinct into law, and attached a reward for following it, all to help stop deed fraud before it starts.
As of July 1, 2026, settlement agents that conduct business in the commonwealth must exercise “ordinary care” to verify—and prove they’ve verified—a seller’s identity before closing. Notaries also now face stricter record-keeping requirements. Meeting the standard is more than a box to check for title & escrow companies. Done right, it gives settlement agencies a legal bulwark against liability if a deal goes bad after closing.
Here’s what the law says, why lawmakers passed it, and how Qualia Shield can help firms comply, while strengthening their broader fraud defenses.1
What is Virginia’s new deed fraud law?
Deed fraud occurs when someone forges signatures or fabricates documents to illegally transfer a property’s title without the owner’s knowledge, then uses that false ownership to sell the home, take out a mortgage, or rent it out. In April 2026, Virginia’s General Assembly passed companion bills HB 163 and SB 316 after a yearlong study into deed fraud that found fraudsters are increasingly targeting vacant, unencumbered properties by forging signatures and impersonating owners, exploiting gaps in identity verification among notaries, real estate agents, and clerks of court. The first requirements for the resulting law took effect July 1. They amend the Code of Virginia’s notary and settlement provisions to add new duties for settlement agents and notaries.
What does Virginia’s deed fraud law require of settlement agents?
Under the amended § 55.1-903, settlement agents are instructed to exercise ordinary care to reasonably ascertain a seller’s identity before settlement. The statute lists several acceptable methods, including examining government-issued photo identifications like driver’s licenses and passports, requiring multiple forms of identification, obtaining a written statement from the seller’s attorney that the legal professional verified the seller, reviewing land records, comparing signatures, running a credit check, or asking detailed questions about the property. Using one of the listed methods can satisfy the statute’s ordinary care standard, but lawmakers framed the list as a floor, not a ceiling, so agencies could potentially use additional or combined methods.
What is the law’s safe harbor, and why does it matter to settlement agents?
Perhaps the law’s most important feature for settlement agencies is the liability protection. Under § 55.1-903(C), an agent who uses one of the listed verification methods and relies on it in good faith is not liable for acts or omissions tied to that reliance, so long as the agent had no actual knowledge the information was false and didn’t act with gross negligence or willful misconduct. In practical terms, the law turns seller verification from a cost agencies absorb into a protective barrier they can raise if certain title problems surface after closing. That protection only holds, though, if a firm can show it took recognized steps and did so honestly.
What does the law require of notaries?
Every Virginia notary, traditional and electronic alike, must now keep a journal of their notarial acts and hold those records for at least five years. Each entry has to include the date and type of notarial act, a description of the document, the principal’s name and address, and any fee charged.
Critically, it must also record how the notary verified identity: a statement that the person was personally known, the type of ID document presented, or the name and address of a credible witness who vouched for them.
Electronic notaries who verify identity through live video and audio must retain a recording of that session. Notaries have always served as a checkpoint in a closing. This law makes that checkpoint auditable.
How can Qualia Shield help with compliance?
For settlement agencies, meeting the ordinary care standard can mean applying a verification method consistently, on every file, and being able to prove what was done to confirm the seller’s identity. Manual processes like phone calls or signature comparisons can satisfy the letter of the law, but they tend to leave a thin paper trail and depend precariously on execution holding steady no matter how busy the week gets or who performs the work.
It’s here that Qualia Shield can help because its “Verify Identity” feature can be set up by an administrator to automatically perform one of the law’s recognized ordinary care methods.
Early in a transaction, the seller photographs a government-issued ID and takes a live selfie from their phone. Shield checks whether the document looks genuine, whether the person matches it, and whether the name lines up with the seller on the order. The results of this check save to the order as a documented identity risk assessment. That gives settlement agencies the two things ordinary care ultimately demands: consistent verification on every file, and proof it happened.
To be clear, Shield’s assessment is advisory, and a high-risk result should prompt a pause and further review. Also, using Shield doesn’t, by itself, place a firm inside the safe harbor. The statute still requires good faith and no actual knowledge that information was false. The decision and responsibility remain with the settlement agency. Still, Shield does provide a documented method behind that judgment call, which can be the difference between having done the work and being able to show it.
Why did Virginia pass the deed fraud law?
Commonwealth legislators voted the bill into law because deed fraud has become a real and costly problem, according to Virginia’s study. Qualia’s latest report on wire fraud in title & escrow, based on a survey of 802 industry professionals, backs that up. Wire Fraud Trends In Title & Escrow, 2026: An Ever-Evolving Threat found that 9% of title & escrow firms experienced a seller impersonation fraud in 2025 into early 2026. Meanwhile, industry professionals ranked seller proceeds as the transaction component most vulnerable to fraud for the second year in a row.
More broadly, nearly 80% of title & escrow firms experienced a fraud attempt in the past year, and industry anxiety over wire fraud rose 64%. When fraudsters succeed, the numbers get ugly fast: only about 14% of victimized firms recovered every dollar lost, down from 18.5% the year before, and some businesses reported seven-figure losses. Virginia’s deed fraud law is a direct response to this perilous environment.
What should title & escrow firms do now?
Virginia’s deed fraud law raises the bar for how settlement agencies verify sellers, but it also rewards firms that meet that bar with real liability protection.
If your business closes transactions in Virginia, read the actual bill to understand the obligations firsthand, rather than relying on a summary. Then look at how your team verifies sellers today and ask two questions: Does it happen the same way on every file, and could you produce a record of it if a transaction were challenged?
Virginia is the first to write seller verification into the closing process this directly, and to pair it with a safe harbor for the professionals who do it. Given how deed fraud has spread, it is unlikely to be the last. Firms that get ahead of this now will be better protected, whether or not a title issue ever lands on their desk.
Want to learn more about how Qualia Shield can help protect your business and your clients from fraud, then contact Qualia today.
- This post is for general information and is not legal advice. For questions about how the law applies to your business, consult qualified counsel or, in Virginia, the Virginia REALTORS Legal Hotline. ↩︎
