It was January 2022, as fewer properties were being listed and market conditions were tightening in the Greater Toronto Area – this is when police say Toronto homeowners who were away on an extended business trip discovered their home was sold without their consent or knowledge.
Toronto police are now looking for two people they allege impersonated the homeowners, hired a real estate agent and listed the Etobicoke property for sale. The home was sold to new owners who took possession. Investigators say the legitimate homeowners never found out their property had been sold until several months later.
How can something like this happen?
Ronald Alphonso, a real estate investor and president of Mortgage Broker Store, says this occurrence may be more common than one might think.
“Somewhere along the way, a person with access to the land registry system, whether it’s a lawyer or another person, transferred the title from the present homeowners to someone else, illegally,” said Alphonso.
That land registry system, Alphonso says, is administered and owned by Teranet on behalf of the Ontario government. Real estate lawyers and others who are authorized to transfer titles and sell houses have access to it through specific keycodes.
“If their keycode is taken by somebody else or copied by somebody else or misappropriated in some way, that person has access to the system and whatever they want. They can transfer one house or a hundred houses,” said Alphonso.
And it doesn’t take long to do it, Aphonso says.
“The actual transaction is only a few keystrokes at some computer so it can happen within minutes, that you are removed from title,” said Alphonso.
But when does the homeowner actually find out that their property has been fraudulently sold? Alphonso says it could be a month or even six months later.
“They’ll only know when they actually get a document that says they are no longer an owner, such as property tax saying you don’t own the house anymore,” says Alphonso.
And by that time, he says, the fraudsters have usually left the country with little to no trace.
Alphonso says, thanks to COVID precautions, this type of fraud is relatively easy to pull off. Pre-COVID, clients need to go to a lawyer’s office when buying a home to sign documents, where they would answer questions and present identification in person.
“Now, you can do what is called docusign, or electronic signing online,” says Alphonso. That makes it difficult for police to match handwriting in the case of fraud. But what of photo ID requirements?
“You can easily go into photoshop, just copy a passport, change a picture here and there,” says Alphonso. “The lawyer is not going to go back and check all of the information on that passport. You can do the same thing on a driver’s licence. The lawyer is going to accept them at face value.”
In the Etobicoke case, police have not released the names of the accused, only two photos. Global News reached out for more information, but police have remained tightlipped, directing all queries back to their release.
As for how homeowners and buyers can protect themselves against this type of fraud, Alphonso strongly recommends purchasing title insurance.
“That protects the buyer against fraud, illegal transfer of title and a whole range of items,” Alphonso says. “Let’s say you bought the house 10 years ago. The title insurance is still valid. It still insures you against an illegal transfer of your title. So that’s for the existing homeowner. The buyer (can also) get title insurance — it also protects them just in case the title was illegally transferred.”
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