25 Jan Title Fraud – Are You Protected?
There has recently been a fair bit of media attention focused on title fraud. The stories speak about people “losing” their properties to fraudsters or finding out about mortgages that have been fraudulently registered on the title to their homes. Although disturbing, the stories that are being told (and spread) tend to focus on the shock and trauma of finding out about the frauds – and not the solutions.
Despite the seriousness of these incidents and the panic at the thought of it happening to you, the solutions are often relatively simple.
The Ontario Land Titles Act contains various provisions that allow for either a court application or a proceeding before the Director of Titles (DOT) to have a “fraudulent instrument” deleted from the title. The proceeding before the DOT in particular is relatively informal and often quicker (although still time-consuming) than an application to the court. Evidence, usually by affidavit, can be presented to establish that the transaction ( a sale or mortgage) was fraudulent. Cross-examination is usually conducted to test the affidavit evidence. Ultimately if the adjudicator is persuaded that the instrument is fraudulent it ( the transfer or the mortgage) will be ordered to be deleted from the title to the property and the title rectified accordingly.
Two points:
- Firstly, the process to have the title rectified can be time-consuming, taking months. That is unavoidable.
- Secondly, it can be expensive. But that is where title insurance comes into play.
If you purchased a property in Ontario within the last 20 years or so your real estate lawyer likely obtained a policy title insurance for you (often without you even realizing that it was done).
Title insurance is now purchased in virtually all real estate transactions. 20 or so years ago it was just starting to become common.
Fraudulent transfers and mortgages are among the many things that are covered in a title insurance policy. If you are a victim of one of these types of frauds your title insurer will appoint (and more importantly, pay) a lawyer to represent you and bring the legal proceedings to have your title rectified. If you do not have title insurance then you would need to retain your lawyer to do so, at your own expense – which can easily exceed $10,000.00, often more.
So the moral of the story is a simple one – check to see if you have a policy of title insurance – which would generally be referred to in the reporting letter that you received from your real estate lawyer when you closed your property purchase. If you have one, sleep easy. If you do not, it’s well worth the investment to get one now.
Do you have questions about this? Don’t hesitate to reach out to us at info@fijlaw.com to learn more.
Philip Polster is a civil litigator with more than 30 years of litigation experience. Phil’s practice includes debt collection and a wide range of general contract and tort litigation.
Identifying issues, evaluating options, and providing clear advice, he helps clients make informed business decisions. He focuses on minimizing risk and finding timely, practical solutions to business disputes.