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Identity Theft
Shawn Swarts
Shawn Swarts

This is a hot issue in Ontario today, particularly with property fraud. Property fraud is where someone masquerades as a property owner and either sells the real owner's property or mortgages it. It is far easier to do this with Ontario's electronic registration system (commonly called "e-reg"), which applies to most of the properties now in the Province. Incidentally, Norfolk County went "live" on December 11th of this year for most properties in Simcoe and Port Dover as well as some other areas. A Court of Appeal decision in November made this situation go from bad to worse. Basically, the decision says that mortgages forged by identity scam artists are valid and enforceable if the lender was "innocent". The same principle would apply to bogus deeds where the buyer was innocent. McGuintys Government has proposed legislation to help the situation but there is legitimate criticism that it does not go far enough and also, it would not be retroactive so any misdeeds (pardon the pun) would not be rectified. Essentially, the new law would reverse the Court of Appeal decision to make the fraudulent mortgage or transfer void. However, if there was another transfer to another "innocent" person, that 2 transfer would be valid. This is a valid criticism of the proposed law. An interesting twist to this situation is that there is a private members bill proposed by Tory MPP, Joe Tascona which, although it will probably not see the light of day, would be a much better solution than the Liberal Governments Bill. In the meantime, what we are left with, is Ontarios existing Assurance Fund. It is a fund of last resort and many in the industry have been critical of the way it is administered. It should pointed out however, that this Fund only applies to properties under the Land Titles system, which all e-reg properties are. There are many properties in Norfolk County, and in various areas of the Province, that are not Land Title. One thing that many are considering, and I never thought that I would be suggesting this, is to purchase title insurance. It can be bought at the time of purchase or afterwards. You can buy insurance for just about anything in this world for such things as death, disability, catastrophic illness, so it should be no surprise that there are insurance companies that offer insurance for land owner titles. Should you have any questions for Ask A Lawyer, please direct them to the Simcoe Reformer or ask a lawyer of your choice.