Your home is often your most valuable asset. It’s also something you care for, maintain, improve, personalize and cherish. For this reason, “home” to many people means a safe place. And yet, title fraud has been on the rise – primarily in Ontario, but also in BC – and is causing concern for many homeowners.
This article pertains to properties in British Columbia and will answer the questions:
- What is a property title?
- What is title fraud?
- How can you combat it?
Property Title & Title Fraud
In British Columbia, “title” refers to a document that shows the owner(s) of a particular property.
Title fraud is a crime that occurs when a fraudster successfully represents himself as the property owner in order to either (1) sell the property – often to an unsuspecting and innocent buyer – and disappear with the proceeds, or (2) mortgage/refinance the property, duping the lender and vanishing with the proceeds.
In the first scenario, the innocent Buyer gets to keep the property and the Seller loses his home but has financial recourse against the BC Assurance Fund. In the second scenario, the property owner incurs costs to prove that the mortgage is fraudulent and the lender incurs financial loss in the amount of the funds they advanced under the mortgage.
This is why identity (ID) verification and in-person meetings are so important.
Combating Title Fraud
The good news is that many attempted title frauds are flagged as suspicious transactions before perpetrators can carry out these complex schemes. Diligent realtors, mortgage brokers, notaries public and lawyers understand the importance of consistent, valid identification to help prevent fraud by accurately identifying clients, verifying official ID documents, asking questions, checking property records, and meeting clients in person.
But there are additional measures that owners can take to protect their own home:
- Google Alert
Set a Google alert on your property address so that you will be notified if your property is listed for sale. - Parcel Activity Notifier (PAN)
Contact your notary public to obtain a Parcel Activity Notifier (PAN) subscription. This service is akin to setting up an “alarm” on your property title; in the same way that a house alarm will blare when an intruder enters your home, PAN provides a notice when there is any activity on your title. - Duplicate Certificate of Title
It is possible to “take out” the Duplicate Certificate of your property title. This means that the Land Title Office issues the original Duplicate Certificate and a notation is placed on title to document the same. The property cannot be mortgaged or transferred while the Duplicate Certificate is out.
Note: loss of the original certificate can cause substantial issues when the time comes for the true owner to sell or mortgage the property. - Title Insurance
Arguably, the best way to combat title fraud is to obtain insurance. A title insurance policy protects the policyholder(s) (owner, lender) from financial loss – including associated legal expenses – incurred as a direct result of unforeseen title challenges, defects and fraud. Most banks require a lender title insurance policy to be obtained for them prior to funding a mortgage, but a prudent notary or lawyer will inform their client of the benefits of purchasing a homeowner policy and will facilitate the purchase of the policy at the time the client buys the property. That said, if a homeowner finds himself without coverage, it is possible to obtain a homeowner title insurance policy, even if you have owned the property for years already.
To obtain more information or order a policy, please contact our office for assistance.
