SHB 2298

Exempts fraud protection instruments and their releases from all existing recording surcharges — including the $100 covenant homeownership assessment, $2.50 surcharge, and $183 surcharge — which reduces revenue for housing and homelessness programs. Although the bill redirects *most* remaining surcharge revenue to housing, the exemptions reduce the total pool of funds available. Since these surcharges are broadly applied to all property recordings (including those by high-value property owners and developers), the revenue loss disproportionately affects programs serving low-income households. The $183 surcharge alone funds over half the state’s homelessness assistance grants; eliminating it for this new filing reduces resources for emergency shelter, permanent supportive housing, and rental assistance.

The bill creates a voluntary fraud protection instrument that blocks property transfers unless a secure ID, court order, or override is used — but only for enrolled property owners. This may reduce fraud for participants, but it does not prevent fraud at scale or address systemic vulnerabilities in the recording system. Since enrollment is voluntary and the program lacks proactive monitoring (e.g., no requirement to notify owners at risk), it may create a false sense of security for non-participants. Low-income, elderly, or non-English-speaking property owners are less likely to enroll, potentially increasing their exposure to fraud relative to wealthier, more connected owners.

Redirects $183 surcharge revenue to housing accounts (home security fund, affordable housing for all, landlord mitigation), but the bill’s exemptions for fraud protection filings reduce the total revenue available. While the redirection is progressive in intent, the net effect is a smaller funding pool for housing programs — especially problematic given Washington’s acute homelessness crisis. The state fiscal note projects increased revenue *from remaining surcharges*, but the exemptions mean less money than would otherwise be collected. This reduction hits counties and cities hardest that rely on these funds for local housing and shelter operations.

The bill enhances property rights protections by allowing owners to file a fraud protection instrument that blocks unauthorized transfers — a meaningful safeguard against title fraud, especially for vulnerable populations (e.g., elderly, absentee owners, non-English speakers). However, because enrollment is voluntary and the program does not automatically apply to high-risk properties, it does not constitute a universal right-based protection. The emergency override (via court order) preserves due process, but the burden remains on the owner to initiate the instrument.

County auditors gain authority to implement a voluntary program and may delay recording of property transfers for up to five business days when a fraud protection instrument is on file. This adds administrative complexity and potential delays to real estate transactions, especially for title companies, escrow agents, and courts handling override requests. While the bill allows counties to coordinate with treasurers or excise agents, it provides no new funding to support this added workload — potentially straining local resources without compensation.