It may seem implausible but there's a chance someone can steal your house. Title fraud has been an issue in Canada for a while and although it isn't too common, the damage can be immense.
Similar to credit card fraud, title fraud normally starts with identity theft. Once someone steals your identity, they act on your behalf and carry out transactions as normal.
What does title fraud look like?
After stealing your identity, someone could replace your current mortgage with a more valuable one, pocketing the difference.
Someone could transfer the title of your property, take out a line of credit or mortgage, and disappear with the funds.
Someone could even sell your property, leaving both you and the buyers in an uncomfortable situation as they show up with moving trucks, ready to move in.
Since these mortgage or transfers were taken out in your name, it will be up to you to prove that you were the victim of fraud. You will be responsible for the repayment of any debt or be forced to hand over your home to the new buyers. The onus falls on you!
So, if you are planning on buying a home or condo, or even if you already own one, you may want to consider residential title insurance.
Although title insurance is not required in Ontario, keep in mind that title insurance protects property owners and lenders against losses related to the property's title or ownership, such as title fraud.
If you currently hold a mortgage or line of credit against your property, you are less of a threat to title fraud because the property is not free and clear of encumbrances.
What does title insurance cover?
Unknown title defects
(ex. issues that prevent a clear ownership of the property.
Existing liens against the property's title
(ex. unpaid debts from utilities, mortgages, property taxes, or condo fees from previous owners).
(ex. structure on your property needs to be removed because it's on your neighbour's property).
(ex. someone steals your identity and transfers the title to get a mortgage on your home, disappearing with the money).
Errors in surveys and public records
Other title-related uses affecting the ability to sell, mortgage, or lease the property in the futures.
At this time, the insurance carriers provided through Scrivens do not offer title insurance however we are working with them to develop a product that would provide this coverage. As soon as we finalize this option, we will let you know. In the meantime, we will help you find the best solution.
Did you know there is a mortgage-free discount available for property owners? If your property no longer has a mortgage or line of credit against it, please let us know to take advantage of this discount.
What about identity theft insurance?
Most homeowners, condominium, and tenants insurance policies include identity theft coverage or may be included for a nominal fee. Depending on your insurer, this coverage extends to other living in the same household and to children while away at school.