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General information: Be aware of the signs of real estate title fraud

Bulletins and notices.

With title fraud on the rise across Canada, the New Brunswick Real Estate Association and the Financial and Consumer Services Commission remind real estate agents and licensees to help prevent fraudulent real estate transactions by ensuring their clients are who they claim to be. 

This alert is issued during Fraud Prevention Month following recent reported cases of title fraud across Canada.

Regulators across the country are warning of cases where fraudsters attempt to sell properties without the owners’ permission. Through identity theft, fraudsters are posing as the owners, listing the property with a real estate licensee and selling the home.

What can licensees do to prevent title fraud?

As a real estate agent and licensee, you are required under the Proceeds of Crime (Money Laundering) and Terrorist Financial ACT (PCMLTFA) to collect specific client information and verify government issued ID. This is especially important if you don’t meet the client in person and are communicating exclusively via email or text message.

You can confirm in person that the individual looks like the photo on the identification provided by checking the details such as age, height, and eye colour to make sure it matches. Where an individual is not physically present, you must verify validity of a government-issued photo identification by using a technology that can assess the document’s authenticity. FINTRAC methods to verify identity outline several approaches to meet these requirements. Below are some other suggested best practices:

  • Get to know your client by asking the following questions:
    • Where do you work?
    • How long have you lived at the current address?
    • Where have you lived previously?
    • What is your marital status?
    • Where do your children go to school?
  • Take notes to record the information. Check over time to see if the information changes, which could raise a red flag. 
  • Verify information about a seller on the property title. Look for discrepancies, such as the spelling of your client’s name or charges registered against the property. 
  • Compare information on documents provided by your client to see if it is consistent with other information they provide you.
  • Ask for details that a homeowner would generally know, such as how old the furnace is, when the roof was last replaced, and details about renovations.  
  • Watch for the following red flags:
    • Refusal to publicly list or advertise the property.
    • Request for a quick deal.
    • An empty or abandoned property.
    • Unusual email address formats.
    • Willingness to accept much less than market value.
    • Inability to provide receipts to support renovations, utility statements, property tax bills or other documents a homeowner would have. 

Be aware that these fraudsters can be extremely convincing. Always report this type of fraudulent activity to NBREA, FCNB, and local police. Using best practices for identifying your client is the best defense against this type of fraud.

For more information on title fraud and other types of mortgage fraud, visit FCNB’s Frauds and Scams database or download the Blueprint to Protect Yourself Against Mortgage Fraud.