Recent news stories have highlighted the dangers of real-estate title fraud, which take place when fraudsters or scam artists steal ownership of a home in order to benefit from its value.

Yesterday, CBC News reported on a Toronto family that was able to thwart an attempted scam where someone used fake identification to pose as the 95-year-old homeowner and convinced real estate agents to list the home for sale without the family’s knowledge or permission.

The case resembles an ongoing Toronto police investigation, in which police say two homeowners left Canada for work in January 2022 only to learn months later that their property had been sold without their knowledge by people using fake identification.

So, what is title fraud and how can you prevent it from happening?

What is title fraud?

Title fraud takes place when a person uses fake identification or forged documents to steal the identity of a homeowner and take away their “title,” or legal ownership of a property.

Once fraudsters have their hands on a property’s title, they can re-mortgage it, sell it to an unsuspecting buyer, or extract value from it in some other way and make away with the proceeds.

Homeowners often don’t learn about what’s happened until they receive notice of missed payments or they try to sell, title insurance company First Canadian Title (FCT) says on its website.

Victims of title fraud lose the right to mortgage their home, can no longer leverage the equity and can’t sell the property until they re-establish their title rights through the courts, according to FCT.

“It can take considerable time, money and effort to deal with having to restore your title and/or remove any fraudulently registered mortgages,” FCT writes on its website.

Morris Cooper, a civil litigation lawyer in Toronto who successfully argued a landmark case in 2006 that shifted the responsibility for title fraud from victims to lending institutions, said seniors and people who rent out their homes to tenants can be at a high risk of title fraud.

But homeowners can take steps to protect themselves. 

Take steps to protect your identity

Stealing a person’s identity is often the first step in title fraud.

Government-issued identity documents, including driver’s licences, passports, birth certificates, social insurance number (SIN) cards and citizenship cards, can all be used to apply for mortgages or to take steps to buy or sell a home.

The Canadian Anti-Fraud Centre offers the following tips for preventing identity theft:

• Be wary of who you share personal information with.
• Regularly check credit card reports, bank and credit card statements and report anything irregular.
• Shred documents containing personal information before placing them in the garbage.
• Limit mail theft by regularly retrieving mail.
• Notify the post office, financial institutions and other service providers of your new address when you move.