Property Fraud Reforms Only Tinkering: Victims
Excerpt from an article by Harold Levy - Toronto Star
Ontario’s proposals to protect homeowners from real estate fraud won’t help victims who have lost their homes to identity thieves, because the government-run land titles registration system failed them, critics charge.
“I relied on their system and it failed me,” said Susan Lawrence, a North York widow who lost her century home to identity thieves.
After a news conference held yesterday by Government Services Minster Gerry Phillips, Lawrence was surprised to see no plan to reform “obvious problems” in the unwieldy system to compensate victims like her.
Phillips told reporters that a bill, which he plans to introduce this fall, will cure a glaring defect in Ontario law.
Currently, the law provides that fraudulent property transactions based on bogus mortgages, land transfers, and powers of attorney are considered lawful by the courts as soon as they are registered under the province’s land titles system.
Because of that defect, homeowners may find themselves on the hook for mortgages fraudulently put on their property without their knowledge — instead of the banks and the mortgage companies.
Homeowners may also discover to their horror that they are in danger of losing their properties permanently to people who bought them from criminals without knowing of the fraud.
Other measures in the bill proposed yesterday will give officials the power to suspend or revoke access to the land titles system by suspected real estate fraudsters.
Penalties for real estate fraud under provincial legislation would increase from the current $1,000 to a maximum of $50,000 — in addition to punishment under the Criminal Code.
But the minister made no mention of Ontario’s unwieldy Land Titles Assurance Fund, which exists to compensate people who have suffered financial loss because of errors or fraud in the land titles registration process.
Critics say that homeowners who have been exposed to losses of hundreds of thousands of dollars because a government-run institution did not do its job should not have to spend up to $30,000 on legal fees to recover from the fund or to bring lawsuits against those people who may be responsible for the loss, as is currently the case.
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