Thieves Sell Couple’s Home for $1.7 Million in Toronto Canada Through Title Fraud

A couple from Toronto, Canada, recently discovered that thieves sold their home for $1.7 million while the couple was in the UK. Authorities say this type of theft is not common, but there has been a noticeable increase in comparable occurrences in the country’s most populous metropolis.

Early this year, Toronto police said they needed the public’s assistance in apprehending two suspects involved in a complex fraud scheme.

According to the BBC, the suspects used forged identities to pose as city property owners. They sold the house and handed the keys to the unwitting new owners. The true owners of the house had been out of the country on business since January 2022.

After noting that their mortgage payments had vanished from their bank accounts, the out-of-town couple discovered that their home had been sold without their knowledge.

The incident piqued the interest of many Canadians, particularly in the Greater Toronto Area and Vancouver, where real estate is considered a national obsession due to its high cost – the average home costs more than $ 1 million, and homes are scarce.

Similar claims from other Toronto property owners have emerged, and police say these previously uncommon examples of property title fraud appear to be on the rise.

These situations are “certainly unique to this moment in time,” according to Trevor Koot, CEO of the British Columbia Real Estate Association and a nearly 20-year industry veteran.

“I’ve never seen anything like it,” he stated, referring to the complexity employed to carry out these crimes.

What exactly is title fraud? How much has it increased in Toronto, Canada?

Mortgage fraud and title fraud are common schemes involving home or property ownership.

According to Brian King of King Advisory International Group, a Toronto-based organization investigating white-collar crime, mortgage fraud is more widespread.

Why does it take 30 years in Canada to buy a house?

It is committed when a fraudster uses forged identifying documents to get a second mortgage on a home in Canada they do not own, usually after the first mortgage has been paid off in full or almost so.

On the other hand, title fraud entails tenants impersonating the owner of a vacant home and selling it to serious buyers. This results in the property’s total title transfer.

If the home has title insurance, the true owner and buyer in Canada can usually obtain most of their money back. The insurance covers legal expenditures paid during the procedure and aids in re-establishing ownership.

Mr. King stated that he had seen increased mortgage and title fraud frequency since 2020.

According to him, his firm has experienced a “rash” of title fraud in recent years. In almost all cases, the homeowners lived elsewhere when fraudsters took over their property, in nations such as the United States and China.

Mr. King mentioned a couple from Toronto who relocated to the UK for work in 2018. Their house in Canada was later sold from beneath them in 2022. It was sold for C$1.7 million and had been completely refurbished when they discovered it had been stolen in June. As of February, the couple was still working on getting their home’s title returned.

According to John Rider, vice-president, between the 1960s and 2019, Chicago Title Insurance Company’s Canada branch saw only two occurrences of fraud – mortgage and title.

They are currently dealing with scores of cases, including at least five examples of title fraud, all in the Greater Toronto Area, which covers the city and adjacent towns.

Comparable incidents of title fraud have appeared in the province of British Columbia, which is home to the city of Vancouver, where the typical home costs C$1.1 million, albeit on a less frequent basis.

The BC Land Title and Survey Authority (LTSA) reported two attempts at title fraud since 2020, just one of which was successful. The public corporation noted that it is only aware of one previous incidence in 2019 and two in 2008 and 2009.

It claims that these fraud cases are extremely unusual, even though the LTSA processes up to one million land title applications annually.

Why are there more reports of title fraud?

Scientists are baffled as to why there has been such an increase in reported cases, notably in Toronto.

Mr. King believes that virtual real estate transactions during the pandemic may have made it more difficult to detect phony identification documents. He also mentioned that the epidemic had compelled some people to stay away from their homes for prolonged periods because to travel restrictions.

Others have noted the increasing sophistication of the criminals, some of whom have been tied to organized crime and appear to have a thorough understanding of the real estate sector in Canada.

According to Mr. Rider, the phony Identities used in these transactions frequently appear authentic, and offenders would hire professional actors to pose as homeowners and carry out the operation.

“IDs are so easily falsified now that they can’t be relied on to close a $3 million transaction,” Mr. Rider added.

There is also the financial aspect of these crimes. Real estate in Toronto, Canada, has appreciated dramatically over the last two decades, with the average property costing C$198,150 in 1996. It was C$1.18m last year.

“It makes logical that there is a lot of emphases on where real estate is very valuable,” said Ron Usher, general counsel for the Society of Notaries Public in British Columbia, Canada.

However, Mr. Usher noted that little is known about these alleged incidents of title fraud, which are frequently complex.

“These are not easy crimes to commit, and they are frequently caught and prevented.”

He and others have asked for a national review to discover the underlying causes and whether more can be done to protect Canadian homeowners.