Buying property represents a major milestone in many people’s lives and can often symbolize stability and security. Property ownership often brings a sense of pride and accomplishment, provides a space you can call your own and can represent a significant investment in your future.

However, property owners must be mindful of title fraud. The recent high profile news reports of fraudsters stealing homes in Toronto and in BC have caused much anxiety to homeowners everywhere.

So what is title fraud? Title fraud can mean many things, but in general, it is a type of fraud that typically involves the fraudulent sale of a home or refinancing of a property that does not belong to the fraudster who poses as the real owner. It can result in the rightful owners losing their property or being encumbered with a mortgage that is not their own. Title fraud often goes undetected until it is too late – so let’s look at how you can safeguard your property and protect yourself from title fraud.

What Is Title Fraud?

Title fraud is a type of real estate fraud in which someone falsely claims ownership of a property and then sells or uses it as security for a mortgage loan. Title fraud can be committed in several ways, including:

• impersonating the rightful owner and selling the property without their knowledge or consent
• impersonating the rightful owner to borrow money secured  against property to which the fraudster does not actually own
• creating false documents to support the fraudster’s claim to ownership for nefarious purposes
• falsifying the history of the property to make it appear that it has a clear title when it has liens or outstanding debts on title
• fabricating a chain of title to make it look like the fraudster has a legitimate claim to the property

How Can I Protect Myself from Title Fraud?

You would think that the individuals most vulnerable to title fraud are typically first-time homebuyers, the elderly, and those unfamiliar with the real estate purchasing process. While it’s true that these groups can be more susceptible to these scams, the reality is that the risk exists for all homeowners regardless of your experience or your background.

Here are some tips for protecting yourself and your loved ones against title fraud:

• Conduct a thorough and current title search to verify ownership information before purchasing a property. It’s essential to verify the authenticity of the title deed and any other related documents. This can include searching public records and checking for liens or encumbrances and obtaining a title search from the BC Land Title Office.
• Engage a qualified real estate lawyer to handle the transfer of title and perform due diligence. Legal professionals have experience to help verify the authenticity of title documents and to protect your interests during the process.
• Keep your personal information secure to prevent fraudsters from using it to commit title fraud. That includes your social insurance number, passport information and home address.
• Regularly monitor your credit report to detect any unauthorized activity, such as the opening of a new bank account or line of credit in your name which may suggest that your financial information has been compromised.
• Purchasing title insurance from a legal professional to compensate you in case you suffer a loss due to title fraud. It’s not too late to buy a policy even if you’ve owned the property for a few years now.
• You can also apply to the land title office to physically remove the title itself, known as the ‘duplicate title’ but then you’re responsible for storing the duplicate title in a safe place, and you’ll need to re-deposit the duplicate title when you want to sell or deal with the property. If the duplicate title is removed, transactions involving the home cannot take place, however if you lose the duplicate title, you’ll have to go through a very burdensome process to replace it.
• Sign up for ‘alerts’ on Google or other search engines which will alert you if there are news about your home address. Many properties listed for sale will be published on a realty webpage, and an alert can give you advanced warning if someone tries to list your property, but this method is not fool-proof and is definitely not a replacement for title insurance which protects a lot more than just a home being fraudulently sold. For example, if a fraudster took out a mortgage and borrowed money against your home, that would likely not trigger a google alert and you may still suffer a loss.

What is the impact to innocent home buyers who purchase a home from a fraudster?

• For now, the legal impact on buyers is, surprisingly, muted. That’s because for innocent buyers who paid fair market value for their homes, their rights as homeowners will in most cases be preserved once they register on title under the current land title system known as the Torrens System. This provides certainty of ownership to buyers, as long as they were not part of the fraud, and as long as they paid a fair price their home, that they have the assurance that the home usually cannot be taken away from them just because a fraudster pretending to be the seller sold it to them.  In other words, this means that registration of the buyer’s ownership provides certainty and is conclusive of their ownership rights, a concept known in law as ‘indefeasible title’ . However, this also means it’s more difficult for the original owners who are victims of fraud, to get their title back once it is registered to an innocent home purchaser.

•  If the buyers paid fair and good money for the house, in most cases, they would be the ones to suffer the loss if they simply gave the house back to the seller, unless they were compensated. However, in most cases, the seller is not going to want to pay additional monies to re-purchase their own house from the innocent buyer. In theory, the Land Title Office in BC has an insurance fund known as the ‘Assurance Fund’ >which should reimburse the owners in case of property fraud. However, in practice, this route is often time consuming, cumbersome, and the owners face significant hurdles to go through the process to get fully compensated from the Assurance Fund. Buyers are encouraged to purchase private insurance known as ‘title insurance’ which will often compensate the buyers if they suffer any loss as a result of title fraud. Title insurance can be purchased through a lawyer or notary public, and provides more protection in the form of financial compensation to title insurance policy-holders affected by the fraud which could include not just individuals but also the banks who lend mortgages registered against a fraudulent title.

Can owners who are defrauded get their house back?

• going back to the concept of ‘indefeasible title’, it may be difficult for the original owners to ‘get their properties back’ as long as the buyers were not part of the fraud, and paid fair market value for the properties. Sellers could in theory re-purchase the property back from the innocent buyers with the financial compensation from title insurance, but there is no guarantee that the buyers would be willing to re-sell the house back to the seller. Of course, each case has to be looked at on a case-by-case basis, and if the buyers did in fact collude or co-operate knowingly with a fraudster to purchase the property, then the defrauded homeowner could take the matter to the BC Supreme Court, but that could still involve lawyers and potentially a trial, hence the necessity of title insurance to potentially pay for the legal expense of doing so.

Real Estate Lawyers in Richmond, British Columbia

If you suspect that you are a victim of title fraud, report to the police immediately and consult a real estate lawyer. Reinstating ownership of a property title can be time-consuming and often times, you must act quickly.  At Bernard Lau & Co., we have experience to advise you on protecting yourself from title fraud. If you’d like to learn more about title fraud or would like to order title insurance, call us at 604.285.5242 or complete our contact form to arrange a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

When buying a home, one of the most important legal steps is for your lawyer to ensure who holds title to the property. This title verification is often done by way of a title search, and can be certified by a document known as the State of Title Certificate, which is simply a certified copy of the title search. In short, property ownership, whether commercial or residential, can be proven by a title or a state of title certificate. A real estate lawyer can confirm legal ownership by conducting a title search on your behalf so that the registered owner is consistent with the name of the seller on any contract of purchase and sale for that property. Sometimes the legal name on a title search may not always correspond with that owner having beneficial ownership of the property, such as in the care of a bare trust relationship, but that is beyond the scope of this article and you should obtain independent legal advice on this issue if you have any concerns.

What Is a Title?

A title shows the legal rights of ownership of real property consisting of land and buildings on the property. In simple terms, having title often provides the title holder with a bundle of rights, including:

Conveyance rights: This refers to the transfer of title or ownership of property from one person (the seller) to another (the buyer).

Disposition or collateral rights: The title holder often has a right to refinance, gift or transfer ownership of their property to someone else.

Exclusive use: The property owner is often entitled to utilize, occupy and enjoy the property or to allow others to do the same.

Types of Title

A title can be held by one or several persons. A single owner will hold sole title. However, multiple owners who hold title to the same real property can be categorized as either joint tenancy or tenancy in common.

Joint tenancy
Joint tenancy refers to two or more individuals who hold an equal percentage of interest in a property. Their title rights are equally shared. If an owner dies, the property in many cases, will transfer to the surviving joint owners.

Tenancy in common
Tenancy in common allows two or more people to hold equal or unequal percentages of legal ownership in a property. If one tenant in common owner dies, that share passes in accordance with the deceased’s Will or under the laws of intestacy if there is no Will, rather than automatically to the other surviving owner.

A real estate lawyer can advise you on your property ownership rights and discuss with you some of your options to hold title. Remember, title can be a complicated legal issue and the name you see registered on a title search may not always equate to that individual or company actually holding the beneficial ownership of that particular property, such as in the case of a trust relationship that may not be visible in a title search. Accordingly, if you have questions or concerns about title, it is best that you consult with a legal professional to examine title on a case by case basis since each set of circumstances behind title ownership are unique.

What Is a State of Title Certificate?

A state of title certificate is a certified copy of the title usually issued by the province or the land title office. This legal document identifies the legal owner of that property. The certificate lists key identifiers, including the property’s legal description and parcel identifying number (PID), the legal owner(s) name and mailing address, and any outstanding liens or encumbrances.

Real Estate Lawyer in Richmond, BC

Bernard Lau and Co. would be happy to provide legal advice on real estate law or if you have any questions about title ownership.

Call us at 604.285.5240 or complete our contact form to schedule a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

Buying a house is one of the biggest investments you will make in life. Whether it’s your first home purchase or your fifth, there are numerous responsibilities that come with a newly bought home.

While it may feel overwhelming – as well as exciting – it’s important to ensure that you and your new home are well protected. Although most of us know about fire insurance and homeowner’s insurance to protect our home’s physical structure and personal contents, it’s important not to forget about insurance coverage for our property’s title, which is just as important but more easily overlooked. One of the ways this is done is through title insurance.

What Is Title Insurance?

First, it’s necessary to understand what title insurance is. “Title” refers to the property’s ownership, while “title insurance” is a form of insurance that protects against risks to your title.

Title insurance can oftentimes protect both lenders and homebuyers against loss or damage occurring from illegal liens, encumbrances, or defects in a property’s title. Common claims filed against a title are tax liens, builder’s liens, certificates of pending litigation, and encumbrances such as mortgage loans, and home equity lines of credit (HELOC).

It’s essential to learn as much as you can before making such a substantial purchase. When in doubt, don’t hesitate to consult an experienced real estate lawyer about your specific situation. To get you started, here are some of the most significant benefits of title insurance.

Benefits of Title Insurance for the Homeowner

Title insurance can protect you for as long as you own the property. It protects against a number of risks. These risks may include:

Encroachments that would be disclosed by a new survey

For example, title insurance protects you if a neighbour’s deck is being partly situated on your land. Title insurance also covers encroachment issues such as if your backyard shed is actually on your neighbor’s property and must be removed. If the encroachment cannot be removed for safety reasons (such as a retaining wall), then you may need to compensate your neighbour for the encroachment, and title insurance may provide coverage for such costs.

Not having a survey

Although having a survey is advisable, title insurance can offer legal protection in lieu of a survey by transferring any risks that may have been disclosed by a survey, to the title insurer with respect to defects in title and other defects such as encroachments.

Someone other than the homeowner having interest

For example, a previous owner of the property not being properly discharged from title or a previous owner claiming a beneficial interest or unregistered title to the Property.

Liens from contractors, taxing entities or previous lenders

Title insurance can protect homeowners from charges accrued by previous owners. For example, if the former owner failed to pay municipal or school taxes and the tax authorities file a tax lien on title, title insurance may protect the new owner from title defects and unpaid tax liens or assessments. If previous mortgages or charges by lenders of the previous owner remain on title, title insurance may cover the costs associated with discharging these liens from title.

Forgery or fraud

Title fraud, which occurs when a person uses false identification to impersonate you to obtain a mortgage or sell the home without you knowing, is one of the more common risks that can be addressed by title insurance. Such consequences can be devastating and recovery through the Courts or other means without title insurance can be time-consuming, stressful and costly.

Title Insurance vs. Homeowners’ Insurance

Some homeowners assume that title insurance is included within a home insurance policy. Because of this misunderstanding, an alarming number of Canadians today do not have title insurance.

While home insurance may protect homeowners from unexpected circumstances that occur on or against their property or its contents, such as fire or earthquakes, title insurance protects the homebuyer from unexpected circumstances that affect the title to the property, such as financial loss from title fraud or other issues. The title insurance’s coverage is often less tangible and inconspicuous compared with the physical damage that a fire may cause, but the financial consequences of title fraud or a fraudulent mortgage registered against your property may be even more severe.

Fortunately, unlike home insurance, title insurance is a one-time premium that is typically purchased at the same time as the property. However, title insurance can also be purchased by existing homeowners who already own their property.

Are You Looking For a Real Estate Lawyer?

Title insurance can only be purchased through legal professional. If you, or someone you know, is looking for a real estate lawyer or would like more information on ordering title insurance, contact Bernard Lau and Co. Our knowledgeable and experienced team can provide personalized advice on a case-by-case basis.

Call us at 604.285.5240 or get in touch by email at info@bernardlau.com.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

To help protect buyers in the real estate market, the BC Government is enacting a mandatory three-day Homebuyer Protection Period (HPP). This process, previously called the three-day “cooling off period,” becomes effective on January 1, 2023.

Some people are unclear about how this works and the effect it may have on the housing market. If you have questions, contact the legal team at Bernard Lau and Co. to request a consultation.

Here is everything you need to know about the HPP/three-day cooling-off period.

What Is the New Three-Day Cooling Period?

The HPP, or three-day “cooling off period,” is a safety net for buyers to conduct their due diligence and re-consider their offer before their offer becomes binding. During these three days, potential homebuyers can perform due diligence such as scheduling inspections, confirm financing and decide whether to proceed with the purchase of the property.

However, to make things more fair to the seller, certain fees are payable if buyers make the decision to back out of a sale during the cooling period that is unrelated to any subject-clauses:

Cancellation fees

Buyers wishing back out of a sale must pay 0.25 percent of the purchase price, or $250 for every $100,000 of the price. This fee helps balance the interests of both the buyers and the sellers by compensating the seller in the event an accepted offer falls through, while preserving the buyer protection mechanism at a small cost to the buyer.

Backing Out of a Deal during the Cooling Period 

Homebuyers who no longer wish to purchase the property during the three-day cooling period should serve the seller with a written rescission notice in at least one of the following forms:

• email with read receipt
• registered mail
• fax
• personal service

The rescission notice must include:

• names and signatures of buyer
• name of the seller(s)
• address and description of the property
• date of notice

Note: Buyers will still be able to make offers conditional on home inspections or financing at any time. The Homebuyer Protection Period does not prevent buyers and sellers from negotiating the inclusion of traditional subject conditions and removal periods in their contracts. If subject conditions exist in a contract and are not waived, buyers could potentially walk away from accepted contracts without needing to pay the 0.25% penalty.

Your Real Estate Lawyer in Richmond

The 3 day cooling period is still very new and has not been implemented yet. Accordingly, there will be more answers in the coming months as the cooling period comes into effect. This article is only for information and reference purposes. You should not rely on any information in this article before consulting a lawyer or other qualified professional. Bernard Lau and Co. and its principals will not be liable for any damages resulting from the use of the information and you should obtain independent legal advice prior to acting on the basis of any information in this article.

The accomplished legal team at Bernard Lau and Co. can help you with your next home sale or purchase. Our team has the real estate and litigation experience to guide you through all stages of your real estate transaction, from negotiating the terms of the Contract of Purchase to collapsing deals. 

Call us at 604.285.5240 or complete our contact form to schedule a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.