Protecting yourself from home fraud
January 15, 2023
Over the past few weeks, we’ve seen several stories about GTA properties being fraudulently sold. One was the sale of a condo at Aura Condos, another was the sale of a home in Etobicoke and in the third instance, the sale of a home in the east end which was thwarted before the sale was due to close.
The big question is – how can this happen? It’s truly mind-boggling how thieves are so sophisticated in this new instance of identity theft.
To further complicate the issue, each instance was different.
- It was only when the maintenance fees were no longer coming out of her account that the owner of the condo became aware that something was wrong.
- The owners of the home in Etobicoke were out of town on an extended business trip and had leased the property to credible tenants (only vague details are available).
- At the home in the east end, the elderly owner had moved into long-term care and someone posing as him hired realtors to sell the house.
There are many “checks” in place, including validating ID’s, and agreements of purchase and sale pass through many hands so thefts of title shouldn’t be happening. I remain curious to see how many people were involved in the scheme as well as the possible culpability of the realtors involved. Being a realtor for so many years, one tends to develop a sense about people and situations but that doesn’t negate the responsibility to follow the protocols in place set out by our governing bodies.
When I receive a call out of the blue for a new listing appointment or showing, I always do a some Google sleuthing to make sure the person is legitimate. Not everybody has a major social media presence, but most people have something somewhere online, even if it’s just a LinkedIn account so I can see what they do and who they’re connected to.
There were easily four red flags with the people who rented the house in the east end. According to the CBC, driver’s licenses presented by the sellers didn’t show up in the system and one of the people involved misspelled the name of the person they were impersonating, which should have triggered alarm bells.
As a homeowner, how can you protect yourself?
When you first move in, change the locks! You don’t know who has a key and it’s better not to take risks.
If you’re going away, even for a week, have someone visit on a regular basis. An inspection every four days may be necessary for insurance purposes. The condo at Aura had been vacant since 2019.
Get to know your property manager and maintenance staff. When a condo goes up for sale, the management company always wants to know and needs a signature from the owner in order to allow access to anyone visiting the suite. As well, elevators need to be booked for moving and arrangements have to be made for showings. If something suspicious happens, your property manager can alert you.
Another thing to consider is title insurance. Whether you have a mortgage or not, I always advise buyers to get it, even if seems like a money grab.
It’s important to consider policy limits – sometimes a policy will cover only the purchase price of the home, or sometimes it will cover twice that, but if you bought a home 20 years ago, the value has more than doubled.
Lawyer Aria Doulatshahi says he normally uses Chicago Title and that it offers policy upgrades to cover the market value of the home. If you’re not sure if you have title insurance (if you bought the home a while ago, you may not recall) you can always check with your lawyer who can check with the land registry.
If you have any questions about how to protect yourself form fraud or just want to talk real estate, give me a call!