The Land Title and Survey Authority of British Columbia (“LTSA”) has introduced a monitoring service which could help property owners in British Columbia protect themselves against title fraud perpetrated by identity thieves.
New Title Monitoring Service
The LTSA recently introduced the Parcel Activity Notifier which may help reduce instances of title fraud. This service allows LTSA customers to monitor a property by having the LTSA alert them when a legal notation or pending activity (such as a transfer of ownership, mortgage, judgement or builders lien) affecting that property is registered in the land title office. The Parcel Activity Notifier was brought in to replace the existing Activity Advisory service—a pilot initiative that has been operated since 2004.
According to the LTSA, the Parcel Activity Notifier will deliver convenient and timely alerts that provide customers with:
• Real-time knowledge of actions taken by participating parties in multiple-party real estate deals
• The ability to take immediate action upon notification of registrations on title to a property
• Convenient ordering of documents relating to a property
• Awareness of unexpected changes on title to a property, and
• Guaranteed notification of activity on title to a property backed by the LTSA Assurance Fund Reserve, the fund created to compensate property owners who are accidentally or fraudulently deprived of title to their property
A subscription to the Parcel Activity Notifier for one property costs $5.00 for a fixed period of 180 days. The LTSA does not currently offer automatic renewal, but customers will be notified when they have 14 days remaining in their subscription and again 72 hours prior to expiry, allowing them time to renew the service.
Service Could Provide Warning of Title Fraud
The Parcel Activity Notifier could serve as a preventative tool for property owners who wish to monitor their property for indicators of someone attempting to commit title fraud.
Title fraud is a form of real estate fraud that can take two forms:
1. A fraudster may impersonate a property owner using stolen or false identification and then obtain one or more mortgages using the owner’s property as collateral before absconding with the mortgage proceeds, or
2. A fraudster may register forged documents in the land title office in order to transfer ownership of a property from the owner to the fraudster (or to an accomplice) before registering a mortgage against the property and disappearing with the money
In both cases, when lenders come to collect on mortgages in default, they find an owner unaware their property has been sold or used to secure a mortgage.
Instances of title fraud are still rare in B.C., but they are on the rise—possibly due to soaring real estate prices in the Lower Mainland. As real estate prices increase, so does the size of the mortgages potentially exploited by fraudsters.
While the Parcel Activity Notifier cannot prevent someone from either impersonating a property owner or from submitting fraudulent documents to the land title office, it can provide a warning to owners when a transfer or mortgage relating to their property is submitted for registration. In the case of title fraud, an owner could then take steps to protect title to the property.
Owners Should Obtain a Duplicate Certificate of Title Where Possible
If an owner’s property is not subject to an existing mortgage or agreement for sale, he or she may protect his or her property against title fraud by applying to the land title office to obtain what is called a “duplicate certificate of title”.
Obtaining a duplicate certificate of title for a property should “freeze” title to the property and prevent the land title office from registering a mortgage or transfer against the property until the certificate is returned.
Where available, holding a duplicate certificate of title is the best way for a property owner to guard against title fraud as the certificate would have to be returned to the land title office before a fraudster could register any mortgage or transfer relating to the property. That said, owners who obtain duplicate certificates must take care to keep them safe and secure (in a safety deposit box, for example) as replacing a lost certificate is expensive and time-consuming. Also, we note that there have been rare occasions where the fraudster has been successful despite the duplicate certificate of title being taken out by the property owner.
While subscribing to the Parcel Activity Notifier will not “freeze” title to a property the way obtaining a duplicate certificate of title should, it may offer some protection to property owners who cannot obtain a certificate but still wish to be proactive in protecting their property against title fraud.
EKB’s Commercial Real Estate team is experienced and knowledgeable in this area and can assist you further.