Title Fraud Is real and in the News these days. I am pleased to enclose Title tips which goes over what you need to know about this. I hope you find this helpful. If so, I would ask that you forward this to anyone who you think may find it of interest. Thank you!
Two recent cases in the news have brought to light what lawyers and industry professionals have known for some time: Fraud exists, is real, and is a major issue for lawyers, our insurance companies, the Law Society and Title Insurance companies, all of whom have been ringing alarm bells on this for some time. The two cases in the news involve properties that were either listed or sold out from under the true owner, to their shock and surprise. Here’s what you need to know.
What is title fraud?
Title Fraud is when one person impersonates the true owner of a property usually for the purposes of selling or mortgaging the property to keep the funds. The real owners are typically completely unaware of the fraud until an innocent buyer or bank comes looking for the property or money.
Can you lose your Title through fraud?
No. In 2006, as a result of certain high profile fraud cases, the Restore the Deed Act was passed so that you ultimately cannot lose title through fraud. However, being the victim of Title Fraud can cause a huge legal nightmare for the true owner forced to defend their title to a property against perhaps an innocent purchaser or innocent lender. That is, even if you can no longer lose your title fraudulently, you can face an incredible legal headache if it happens to you.
What can you do to protect yourself?
First, make sure you have Title Insurance. While victims of fraud may be able to claim compensation from the Land Titles assurance fund, the best protection will come from ensuring that you have a Title Insurance policy on your property. This policy will cover you for any actual losses and, most importantly, typically contain a defence of title provision requiring the insurance company to defend, or restore your title. If you have purchased your property after the introduction of title insurance in Ontario, in approximately 1997 or 1998, your lawyer may have obtained the title insurance policy for you on the purchase. If you are not sure you should check your documents. If you do not have a policy, whether it is because you purchased your home before the introduction of title insurance in Ontario or because your lawyer did not purchase one at the time of closing, you can still purchase a Title Insurance policy. You can contact a real estate lawyer for this. This policy will typically involve a reasonable one time premium and cover the home for up to double the value of the home until the property is sold, whether by the existing owner or even its estate.
A further strategy may be to keep your line of credit registered on your property even if you’re not using it. Fraudsters will generally look for properties that don’t have any mortgages on them as they are an easier target. If you have a line of credit that is already on title perhaps keep it there even if you’re not using it as a further risk reduction strategy.
Lastly, and always, protect your identity. Guard your personal information and passwords. Shred documents with sensitive information. Review bank statements, utility bills, credit card statements regularly and be alert for suspicious mail, emails or texts which might suggest that somebody has, or is trying, to fake your identity.
Have any questions, ask your lawyer, if you don’t have one, I can refer several from you to choose.
