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Imagine coming home after an extended holiday to find someone else living in your home without your knowledge or consent? Identity fraud has large-reaching implications when it comes to residential home ownership title fraud. Although, it seems right out of a movie, it does happen in Canada, where thieves impersonate a homeowner to gain control and sell the property for illegal gain. This is referred to as “title fraud” and can happen on residential and commercial properties.

Risk vs reality

There have been several news articles “How to protect yourself from real-estate title fraud” recently from CBC and other news outlets on current title insurance fraud cases.

Where title fraud was once a rare occurrence, there have been over 32 cases in BC and Ontario in the last few years. Mike Holmes, a lawyer, and owner of Pemberton Holmes Real Estate, as reported in the Times Colonist, said “It’s such an exaggerated possibility. Given the safeguards in place in this province — what he called a world-class land-title registry system and a number of gatekeepers keeping watch — it would take an incredible set of circumstances to pull it off.”

Digital fraud on the rise, it is good to be educated, know your rights and protect your assets.

What is the ownership title?

When you own a property, the ownership is legally referred to as a “title”. In BC, a title comes with a description, including the physical address and a unique nine-digit parcel identification number (PID). The PID is used in tax assessments as well as for research and title searches. A basic search is available for free on BC Assessment and here is where you can find your PID number. From there, you can do additional research to find title information. Check out this great blog, by Strawhomes.

What is residential title fraud?

If a property is sold, the seller signs over the deed to the buyer and the title is registered with the local government land registration office. Ownership title fraud occurs when an imposter uses fake identification and/or forged documents to steal the indentity of a homeowner and take away their legal ownership or “title” of a property.

To complicate the situation further, once fraudsters have possession of the title, they can re-mortgage or sell to an unsuspecting buyer or just extract value by putting up the value as collateral and make away with the illegal gains. Victims of these unsavoury actors lose the right to mortgage their home or sell the property until they can re-establish their rights through the courts. This can be a lengthy and costly process.

According to Morris Cooper, a Toronto litigation lawyer said seniors and people who rent out their homes to tenants can be at high risk for fraud. Mr. Cooper argued a case in 2006 that repositioned the responsibility for title fraud from the owner to the financial institute.

If you are a landlord, regularly check your address online at various places on the internet to make sure your property is being used for legal purposes. Insist on bank information instead of cash payments.

What is residential title insurance?

When you purchase a residential property, you should purchase title insurance. Your lawyer will be able to advise you on where and how to buy. Title Insurance is a very specific coverage. This insurance can be purchased at any time, and the one-time premium is good for the duration that you own the property. Title insurance is very affordable and based on housing prices (2021) in BC title insurance can range between $150 – $350.

Title insurance is a policy you purchase to protect residential or commercial property owners and their lenders against losses related to the property’s ownership including title fraud.

Prior to buying a property, your lawyer should be conducting a title search to determine if there are any liens or issues with the property.

Residential title insurance can protect you against issues that could affect your ability to sell, lease, or mortgage your property. It can provide coverage for the following. There are three main categories, title issues, Off-title issues, and transactional issues including:

• An unforeseen defect in your title ownership.
• Records errors.
• The gap period between when a property purchase is finalized or closed and when the title is officially registered with the government.
• Negligence or errors made by your lawyer relating to title risks.
• Unpaid mortgage payments, taxes, strata fees, utilities or other liens.
• Legal expenses incurred by homeowners seeking to restore their rights to their property’s title.
• Encroachment, easing, or zoning issues.
How to protect yourself

One of the first things fraudsters do is start with identity theft. The Canadian Anti-Fraud Centre has lots of helpful tips to keep your identity protected.

Tips to keep your identity safe and avoid title fraud

• Keep government documents secure and in a safe place.
• Do not keep any information regarding government identification (SIN, driver’s license, passports, birth certificates, permanent residence cards) in unsecure digital locations (such as notes, MS Word, contacts, emails, etc).
• Use a digital password vault 
• Check your credit cards, bank accounts, and other financial holdings on a regular basis.
• Retrieve your mail on a regular basis and shred any information that could help in identity fraud
• If you move do an address change with institutions, subscriptions, and Canada Post for at least a full year.
• Don’t give out personal information.
• Understand and recognize spoofing.

Know who you are dealing with

Everyone involved in rentals and home ownership – from lenders and financial institutes to owners and renters, can all play a part in preventing title fraud.

Each party in the transaction should verify and ensure that the other party is legitimate. Do your research, get references, check the documentation, scope out social media, and talk to the neighbours.

Ensure that the person you think you are dealing with is the actual person and has the ownership to conduct a transaction. Look for irregularities and don’t hesitate to ask additional questions.

Discover: 6 things to know about property titles

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