When Melissa Walsh’s great uncle moves into a long-term care home at the end of 2021, just before his 95th birthday, her family decided to rent out the east end Toronto home he’s owned since the 1970s of the last century. The idea was to help him pay his expenses.
The family approached a local brokerage, Royal LePage, where two real estate agents helped them find and screen tenants to rent the house on Maclean Avenue in The Beach neighborhood from December 2021.
That set off a chain of events that Walsh describes as “the ultimate real estate nightmare.”
The family later learned that the chosen tenants had used fake IDs and fake references in their rental application, and Walsh said police ended up calling them “ghosts” after trying to track them down.
What’s more, just weeks after signing the lease, the family learned that someone posing as the 95-year-old homeowner had hired two different real estate agents from another Royal LePage brokerage to list the house for sale without family knowledge or permission.
The home was furnished, advertised online for $1.29 million and quickly generated a flurry of offers, Walsh said. One costs $1.9 million.
“I can’t even put words together to describe this moment at this time because it’s so incredible,” Walsh said. “You’re like, ‘What happened? What’s happening?”
Melissa Walsh, whose uncle’s home in Toronto was put up for sale last year after someone impersonated him, says the incident raises questions about whether the real estate industry is doing enough to verify the identities of the people it works with. (Submitted by Melissa Walsh)
The Walsh family was able to put an end to the attempted fraud before the house was fraudulently sold, but the case bears a striking resemblance to an investigation of The Toronto Police Service (TPS) asked for the public’s help last weekin which other family does not have this luck.
In that case, police say two homeowners left Canada for work in January 2022 — the same month Walsh’s great-uncle’s home was listed for sale — only to learn a month later that their property was was sold without their knowledge by people using false identification.
In an email reviewed by CBC News, a TPS detective in the force’s financial crimes unit, who is investigating, told Walsh the two cases were “connected.” Walsh said the detective subsequently told her that the fake name used by the male tenant who rented her uncle’s home was also used in the TPS case.
CBC News is not identifying the names of the fraudulent tenants because it could identify victims of identity theft.
“At first we thought it was just a handful of real estate agents not doing their jobs, but after hearing about this other house, I think there’s definitely a deeper problem with the real estate industry,” Walsh said.
In the past year, CBC News has reported numerous allegations of fake IDs and other documents being used to rent homes and take out fraudulent mortgages, but these attempted home burglaries appear to be taking real estate fraud to an alarming new level.
Walsh says she was shocked when her family learned that her uncle’s home was up for sale and that two agents who had never rented were given access to the home to furnish it with furniture. (Submitted by Melissa Walsh)
red flags
Walsh said the two cases raise questions about whether real estate agents in the billion-dollar industry are doing enough to verify the identities of potential renters, home sellers and home buyers.
In her family’s case, she said the documentation provided by the tenants and the person posing as her uncle contained several red flags that agents should have noticed, starting with the fact that the person posing as Walsh’s uncle , misspelled his name twice when signing documents.
In vetting the two potential tenants, the agents collected photocopies of their driver’s licenses, contact information for their employers and personal references, as well as credit checks.
The companies listed as employers had very little online presence, including no website.
When the CBC called the phone numbers, the ones given to the employers didn’t work, and neither did one of the personal references. The second personal reference appears to be the wrong number.
CBC News also released the three driver’s license numbers through the Ontario government’s free services driver’s license check tool.
A man and a woman provided these driver’s licenses when they applied to rent the home. When CBC News checked the validity of the license numbers using a free online tool, both were unrecognized. (CBC)
The two licenses provided by the tenants in their rental application came up as “not found,” meaning the Ontario driver’s license numbers were not recognized. The license number provided by the person posing as the 95-year-old homeowner on their registration application came back as “invalid,” meaning it was suspended, canceled or expired.
It is unclear if any of the agents involved ever called the references and, if they did, what response they received. It is also unclear whether they checked the validity of the driver’s licenses or what the status of the licenses was in November 2021 or January 2022 respectively.
“Coordinated Scheme”
In a statement, a Royal LePage spokesman said it does not manage day-to-day operations at its brokerage houses, which are independently owned and operated. But licensed sales representatives are required to comply with industry regulations and carry out due diligence as specified by the regulatory authority.
“This very unfortunate incident was clearly a coordinated scheme to take advantage of real estate professionals and an innocent family,” communications director Anne-Elise Couliari Allegriti wrote.
“The Royal LePage agents in question followed all proper protocols and had no reason to suspect that suspicious activity had occurred.”
According to the Real Estate Council of Ontario (RECO), the industry regulator, both provincial and federal law require real estate professionals to verify the identity of all persons, including buyers and sellers, involved in a real estate transaction.
“Mostly [method] would be to rely on government-issued photo identification to verify the identity of the person they are dealing with,” RECO said in an email.
“Also, information from the local Public Land Registry about the owners of every property in the borough, which needs to be confirmed before we commit to selling a property, is readily available to agents.”
Federal leadership documents that RECO identifies as an industry standard, tells agents they can determine whether an individual’s government-issued ID is “authentic, valid and current” by seeing it in the presence of the identified individual and analyzing its characteristics and security features.
Identification can also be verified without the person’s physical presence, using a scanned version combined with live video chat or a photo of the person being identified, according to the manual.
ID rules too lax, broker says
Varun Shriskanda, a realtor, property manager and housing advocate who was not involved in any of the fraud incidents, said those requirements are too loose to prevent identity theft, mortgage fraud and property fraud.
“We only collect one government-issued ID. This means the fraudster only needs to forge one government-issued identity document,” Shriskanda said.
“All you need is to convince your broker that you are the person standing in front of him and that this ID is yours. Then that house goes to the MLS.”
Shriskanda said the province’s rules should be changed to require agents to check at least two different forms of identification to make it harder for fraudsters to trick agents — something he said it already does as a matter of practice.
Realtor Varun Shriskanda says real estate professionals should be required to check more than one government-issued ID when verifying the identities of clients involved in real estate transactions. (Sean Benjamin/CBC)
Maurice Cooper, a Toronto civil litigation lawyer who successfully defended a landmark mortgage fraud case in 2006, said the onus shouldn’t be on agents.
“They are traders. They get paid if the sale goes through and they don’t get paid if it doesn’t,” Morris said. “The custodians are actually the real estate attorneys who handle the sale and purchase transaction, and they have a duty to verify the identity of their clients in all cases.”
Walsh said her family’s experience shook her faith in the real estate industry.
“At the end of the day, you just assume that these people are doing their jobs, that there are those regulatory bodies that have to follow these rules to make sure that nobody sells their property under them, but obviously those systems are not in place “, she said.
If you have any information on this story, email torontotips@cbc.ca
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