Simple Preventions for Title Fraud
By Tim Janzen
Title fraud happens when someone illegally transfers the title to your property into someone else’s name. It’s not very common, but it can be devastating when it happens.
Does this mean someone can show up at your home with a moving van and insist you move out because they now own your home? Theoretically, yes, but that type of title fraud is quite rare. Title fraud is more likely to happen with properties that people don’t live in, like recreational properties, or on empty lots.
Imagine you own an empty lot that you hoped to build on one day. Normally, if you decided to sell that lot, you would sign a contract with the buyer, and then sign transfer documents with your notary. Once the transfer documents are registered at the Land Title Office (and the other terms of your contract are carried out), the new owner gets “title” to the property.
But fraudsters have been known to make up fake transfer documents and try to file them with the Land Title Office in an attempt to steal property. Normally, there are a lot of checks and balances in our land title system, so most attempts at fraud are caught. If the fraud isn’t caught, though. and your lot does get transferred into the fraudster’s name, the fraudster can then sell your lot to another, completely unsuspecting, person.
Unfortunately, if this happens, you don’t just get your property back, even if you proved that it was stolen. The land registration system we use in BC says that as long as a new owner isn’t participating in a fraud, once property is transferred into that new owner’s name, they have irreversible ownership of the property, even if you never signed a single piece of paper, or received any money for the property.
While that might sound a bit crazy, there are very good reasons for using this kind of system, and the checks and balances that exist are intended to catch frauds before they happen.
While you likely won’t get your property back, there are ways that you can be repaid for the loss of your property. You can buy title insurance, or apply to the provincial government for reimbursement for the loss of your property. Unfortunately, the property itself might be more important than the money. Losing a cottage that has been in your family for decades is a much different scenario than losing an empty lot.
So how can you stop title fraud?
People often think that putting a line of credit on their property will prevent this kind of fraud, but it doesn’t. Property can be transferred from one owner to another even though a line of credit is registered on title.
A simple way to prevent this kind of fraud is to ask the Land Title Office to issue you a duplicate certificate of title. This option is only available to you if you have “clear title” ‒ no mortgages or lines of credit registered on title.
You can do this yourself by contacting the Land Title Office, or you can ask your notary to help you do it. Once the duplicate certificate of title is issued, the title to your property is frozen ‒ no one, not even a fraudster, can transfer the title to your property until that certificate is returned to the Land Title Office.
This is a double-edged sword, though ‒ you need to keep the duplicate certificate of title very, very safe. If you lose your duplicate certificate of title, you have to go through a detailed and costly process to explain the loss and have the Land Title Office fix the problem.
Another possible option is to put a renewable activity advisory on your property. These activity advisories can last for 60 weeks, but need to be renewed, and there are some pros and cons to this option.
Contact us if you want help getting a duplicate certificate of title issued, or an activity advisory put on your property – visit our website for contact information.