Recent cases of title fraud in B.C. and Ontario has made this a top-of-mind issue for property owners across the country. Awareness is your best defence against these criminals and there are a few things we want you to know so that you can make yourself, and your property, less of a target.
How are fraudsters fooling the system?
These criminals are very well prepared, they are experts in the real estate world, and they can seem like the perfect client to a mortgage lender.
Daniela DeTommaso, the president of First Canadian Title Insurance (FCT), one of Canada’s four title insurance companies, offered some sobering insight in an article “What’s next? The future of fraud prevention” posted on the FCT.ca website.
“We’ve never seen the sophistication in the duplication of [ID] documents that we’re seeing of late,” shared DeTommaso, president of FCT, at a recent industry panel.
Because housing records are public – anyone can look up a land title, for a fee, at Service Ontario. Once in the system, fraudsters can find out who owns a property and the property owner’s date of birth. Fraudsters use the information gleaned from the title search, and pair it with a photo of themselves to create a fake ID.
“[…] From a mere visual scan, you would often not even know that this documentation wasn’t real,” DeTommaso said.
Using this fake ID, fraudsters are able to engage a licensed real estate agent to list the property, and once the sale closes, the funds are deposited into the fraudsters bank account – also created using the fake ID – and the fraudsters get away with the money.
These criminals are very good at what they do. The best that we can do to mitigate the risk is to make yourself and your house less of a target.
How to protect yourself.
At McMurter & Associates, we always recommend that our clients invest in title insurance. Although it is not mandatory, title insurance has become less of an option and more of a necessity.
If you are a victim of title fraud, and you don’t have a title insurance policy in place, the process to restore your title, and/or address any fraudulently registered mortgages on the property, is likely to take a lot of time, money and effort.
According to the FCT website, with title insurance in place, homeowners can recover the cost of legal fees associated with having their legal title restored, or even the amount of a mortgage, if the property is sold fraudulently.
How long does title insurance last?
Title insurance is a one-time fee that stays active for the entire duration that you own your property. There are situations, like a re-mortgage, where you will need to revisit your title insurance.
And don’t worry. If you did not opt-in to purchase title insurance at the time of purchase, it is not too late. Homeowners can always purchase what is called an “existing homeowners policy” after the fact.
Still have questions?
McMurter & Associates works with the title insurance companies within Ontario to find you the best coverage that suits your situation.
If you have any questions about your title insurance, or if you would like to purchase a policy, we can help.
This article is intended as an informative piece about the subject. It should not be taken as legal advice. We recommend you connect with a real estate lawyer about your specific legal issue.
McMurter & Associates in Whitby has been providing estate planning services throughout the Durham Region for more than 30 years. We have the experience needed to provide you with expert advice for any of your real estate and estate planning needs.