There have been two incidents this month of homeowners returning from a trip to find their house has been sold or put on the market without their consent.
Earlier this month, Toronto police alerted the public about two people posing as home owners in the Etobicoke area who allegedly hired a real estate agent and listed the house for sale.
Police say the two unidentified individuals were able to sell the property and new owners have taken possession of it.
Toronto police said they are currently investigating a second similar incident. This time, police say the house was registered, but the fraudulent owners were unable to complete the sale. Investigators believe the two cases are related.
There are limited details on what happened this time, but Royal LePage agents fell victim to the latest scam.
“This very unfortunate incident was clearly a coordinated scheme to take advantage of real estate professionals and an innocent family,” Anne-Elise Cugliari Allegriti, spokeswoman for Royal LePage, told CTV News Toronto in a statement Thursday.
So what can prospective home buyers and homeowners do to protect themselves from property fraud?
TITLE AND TITLE INSURANCE FRAUD
The word “title” is used to describe one’s ownership of land. Property fraud is when tile is stolen from someone’s home.
According to the federal government, the scammer will either sell the home or remortgage it.
“Title fraud usually starts with identity theft, which can happen if someone steals your personal information,” the federal government said.
FCT, a home insurance company, notes that it is up to the true home owner to prove that they have been defrauded; if they don’t have title insurance, it can take “significant time, money and effort” to get everything back.
Title insurance can protect property owners against any loss related to the property. While it’s not a requirement to have it in Ontario, Osman Omaid, a Strata.ca broker, “strongly” advises getting it.
“I think the best thing people can do is get title insurance,” Omaid told CTV News Toronto on Friday. “Professionals in the field of real estate [should] I always advise getting title insurance.
Omaid says this type of insurance can protect homeowners in many ways, not only during fraudulent sales, but also when the previous owners didn’t pay their property taxes, condominium fees or utility bills before the sale .
“Title insurance is basically there to take care of you in any gray areas where it’s kind of like, ‘Okay, I should have done my due diligence, but at the same time, it’s not my fault that this happened. [because] someone should have checked this out,” he said.
WHAT REALTORS AND AGENTS DO TO VERIFY THE PARTIES TO HOME SALES
Paul Baron, president of the Toronto Regional Real Estate Board (TRREB), told CTV News Toronto real estate agents have a duty to perform due diligence when taking on clients as required by the Real Estate Brokers and Businesses Act and the Financial Transactions and Reports Analysis Center of Canada (FINTRAC).
“Registrants dealing in real estate are required by law to make every effort to prevent error, misrepresentation, fraud or any unethical practice in dealing in real estate,” Barron said in a written statement.
Real Estate Council of Ontario (RECO) Registrar Joseph Richer said in a statement to CTV News Toronto that the most common way for agents to screen parties in a sale is to rely on government-issued photo identification to verify the identity of the the person they trade with.
“Resources are available to those dealing in real estate to help make their best efforts to verify the identity of home owners, including using the Land Registry service to verify the owner of the property and verify the identity of individuals , that they work with,” Baron said.
Besides checking someone’s photo ID during a sale, Omaid says he can check the seller’s background through a program called GeoWarehouse, which can give him more detailed information about the property in question.
“We are able to see whose name is legally registered under the property,” he said. “There are a lot of steps we take as brokers to make sure we’re talking to the right person.”
In the event a broker or agent falls victim to fraud, Barron says law enforcement or the police should step in. Baron adds that RECO can step in when due diligence is not done by agents.
HOW TO PREVENT REAL ESTATE FRAUD
The federal government has several tips online about what Canadians can do to protect themselves from real estate fraud, including keeping your mortgage information safe, talking to your lawyer before giving someone else title to your home , and to investigate anyone who tries to offer you a loan.
If you believe you have been the victim of property fraud, the federal government recommends contacting the Canadian Anti-Fraud Centre, contacting your provincial land registry office and filing a police report.
– With files from CTV Toronto’s Beth McDonnell and Phil Tsekouras
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