Toronto police have reported multiple cases of title fraud in the past couple of months, including one woman who had fraudsters gain access to her condo while she was living in China and sell it. In another case, a couple working in the U.K. for a few years learned from their property manager that strangers were living in their Toronto home, unaware that they had purchased it from impersonators.
Brian King, an investigator with King International Advisory Group who examines these kinds of crimes, says title fraud used to be almost non-existent before the pandemic. Now, he receives reports of titles being fraudulently transferred as often as three times a week, with most occurrences in the Greater Toronto Area or nearby cities.
What is Title Fraud?
Title fraud is amongst the main types of fraud affecting the Canadian real estate industry. This occurs when ownership or title of a property is fraudulently changed, or documents are forged to allow a fraudster to illegally sell or refinance the property.
As a homeowner, the onus is on you to prove that real estate title fraud has transpired, and this can take significant time, effort, and money to deal with if you are a victim and do not have a title insurance policy in place.
Additionally, you will be unable to sell or mortgage your home until the title is restored, which can potentially disrupt or derail your financial plans.
What Kinds of Properties are Targeted?
Title fraud typically involves homes with low or no mortgages so that scammers can maximize their profits when a sale is made. Fraudsters also target houses that aren’t occupied by the homeowners—like vacant investment properties, or ones that owners are away from for an extended period of time. That way several months can pass before the homeowners even notice a sale has occurred. Additionally, homeowners who rent their homes to tenants could be at a higher risk of fraud because the tenants have physical access to the home.
Steps to Take to Protect Yourself
To help protect yourself against real estate title fraud, you can:
- Contact a real estate lawyer to do a land title search with your land registry office, which will show the name of the property owner and any mortgages or liens registered on the title.
- Keep your personal and mortgage information in a safe place and shred old documents rather than throwing them in the trash.
- If you’re planning on vacating your house for a while, measures like hiring house-sitters or leaving your vehicle parked in the driveway can keep your home off a scammer’s radar.
- As a homeowner you can also search for your property online from time to time to see if it’s being inappropriately listed for sale or on a rental website like AirBnB.
- However, the most important thing a homeowner can do is obtain title insurance, which will protect you from losses related to title fraud.
What is Title Insurance and What Does it Cover?
While title insurance is not a requirement in Ontario, it is strongly advised that homeowners have a policy in place.
For a one-time fee a title insurance policy protects homeowners against losses incurred due to title fraud, or other losses related to their property’s title or ownership. It protects homeowners from fraudulent claims on their property and pays for legal expenses to re-establish the homeowner’s title rights.
Title insurance also protects homeowners in many other ways including protection from losses such as existing liens against the property’s title (e.g. the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property) and encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbor’s property).
Although title insurance can’t prevent you from becoming a victim of fraud, it can protect you from many of its consequences. Many who have owned their homes for years don’t have a title insurance policy in place, and should consider obtaining one as it is very inexpensive to purchase. The cost of residential title insurance varies based on the value of your property, and the insurance company you choose. Your title insurance policy will protect you as long as you own your property, and will cover losses up to the maximum coverage set out in the policy.
How to Obtain Title Insurance?
To learn more about the benefits of title insurance and how you can obtain a policy, please call us at 416-682-7055 or email email@example.com.
At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, real estate law, estate law, employment law, health law, and tax law. For over 130 years, we have earned a reputation amongst our peers and clients for quality of service and breadth of knowledge. Contact us online or at (416) 863-0125. The material provided through the Mills & Mills LLP website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind.