Title Fraud: 7 Ways To Protect Your Property

Did you know that if someone fraudulently sells your home in BC, the innocent buyer gets to keep it? 😲

Most people don’t. 

You’d think that, with all the hoops you have to jump when you buy a property to secure your mortgage and register your title, it would be safe. You wouldn’t expect that fraudsters would be able to take out additional mortgages or sell your house without your knowledge.

In this scenario, you’d be left without a home or the equity you’ve built in it, be on the hook for your mortgage (plus any additional fraudulent mortgages), and face a lengthy legal process. It’s a literal nightmare situation.

You would be excused for thinking that your home insurance would protect you from this type of crime, known as title fraud, but sadly it won’t.

While the risk of these types of fraud is low, the rising cases in Ontario and a string of recent news articles are a concerning trend revealing that this could happen to anyone.

What is Title Fraud? 

Title fraudsters are sophisticated and organized. Armed with knowledge of the homeownership system, they use fake identification to impersonate property owners, organize fraudulent mortgages, and in worst-case scenarios, sell the property.

How To Reduce Your Home’s Risk of Title Fraud

It’s essential homeowners take proactive steps to protect their properties to avoid headaches, heartbreak, and expensive legal fees. 

Below I’ll share important steps you can take to secure your peace of mind (and home.)

1. Take Out Title Insurance

Title insurance is often confused with home insurance, but they are very different. While home insurance covers the structures you own, title insurance’s primary purpose is to protect your property’s ownership. It covers losses from with your title ownership and title risks like defects in the title or property that weren’t readily apparent such as:

  • A secondary party owning a portion of the property
  • Liens against the title
  • Unregistered easements
  • Improvements that violate by-laws that were made without proper approvals
  • Unpaid property taxes

In addition to providing coverage for title defects, title insurance may also covers:

  • Mortgage fraud – when someone steals your identity to get a mortgage. The additional mortgage will prevent you from selling or remortgaging your property.
  • Transfer fraud – when the property is sold without the owner’s knowledge.
  • Some legal fees and other costs associated with restoring the title (depending on the insurance plan.)

Title insurance will cover residential dwellings, condos, cottages, vacant land, cooperatives, and even leased land.

Unlike home insurance, title insurance is a low-cost, one-time fee rather than a monthly premium. The fee for properties under $1M is $150; for properties over $1M, it incrementally grows, making it a no-brainer given the low cost.

Like most insurance in BC, it’s not sold directly to the homeowner. Ordering Title Insurance requires legal services. Our team can organize title insurance for you whether you are currently buying or already own the property. You can email David here or call us directly at 604 685 7786.

2. Have a Current Mortgage on Your Property

Many properties affected by title fraud had “Clear Title,” meaning there was no mortgage on the property when the title searches were done as part of the sale. 

Having an existing mortgage adds another layer of complexity to a property sale because the lender must get involved to ensure it’s paid out. 

But wait, isn’t the goal of property ownership to own it outright? Why would I want a mortgage if I don’t need one?

Yes, and criminals look for the easiest targets, making a mortgage an additional hurdle for them, lowering your own risk.

If you are lucky enough to be mortgage-free, there are a couple of ways to mortgage your home without paying unwanted interest rates.

Home Equity Line of Credit (HELOC)

A HELOC is a line of credit secured by the property and will appear as a mortgage on the title. You can get one when you have equity available in your property up to 65% of the property’s market value.

Many people use their HELOCs to add value to properties for renovations or finance other investments. They have the added benefit of extra protection to your title.

Registering a Private Mortgage on your Title

Anyone can register a mortgage and/or pledge the equity in their property as collateral. You could also register a demand loan or non-interest mortgage on the property to tie up the equity. While a fraudster could discharge this mortgage, it’s an additional hurdle and protection, making you less of an easy target.    

3. Get The Duplicate Indefeasible Title Certificate

While title insurance and mortgages reduce the risk of Title Fraud, there is greater protection for the property owner when you pull the Duplicate Indefeasible Title Certificate. You can get this duplicate of your title from the Land Title Office as long as there’s no mortgage change or right to purchase charge on it.

This option offers the most security for your title.

Once the Duplicate Indefeasible Title has been pulled, the title is frozen until the certificate has been returned. This makes it incredibly valuable (and hard to replace), so it must be stored properly. If you store it at home, you’ll risk theft, fire, and loss. I strongly recommend you use a safety deposit box. 

4. Set Alerts for Your Property Address

Keep on top of new listings or mentions of your property on public websites with Google Alerts. You’ll get a notification when your address is mentioned somewhere online. Here’s how you set up alerts:

  1. Go to Google Alerts
  2. Create an alert for your property address
  3. Specify the frequency you would like to receive the alerts. In this case, I recommend “as-it-happens” to be quickly alerted if someone tries to list your property without your knowledge.

Google Alerts is imperfect and won’t monitor Airbnb or Craigslist. We, unfortunately, couldn’t find a service that monitors AirBNB. Craigslist has a search alert feature worth setting up, but its effectiveness will depend on whether the fraudsters use the address in the listing. Here is a useful article on how to set that up.

5. Regularly Monitor Your Credit Score For Identity Theft

Property fraud relies on someone stealing your identity, so it’s important to safeguard your personal information and monitor for suspicious activity on your credit report.

Some banks provide free reports and update scores monthly. Third-party services Borrowell (Equifax reports) and Credit Karma (Transunion reports) also have free monthly monitoring services. Alternatively, many paid service providers will actively monitor for identity theft.

Other steps you can take include:

  • Keep your SIN safe by not using it as ID and only sharing it with authorized parties
  • Verify whether an organization legally requires your SIN before providing it and offer alternative forms of ID
  • Monitor billing cycles and report any missing or suspicious transactions
  • Report lost or stolen credit/debit cards immediately
  • Only carry necessary forms of ID
  • Don’t write down or carry passwords with you
  • Install internet security software to protect your computer and information
  • Be cautious when providing personal information over email or the internet
  • Take extra care when sharing information on social media platforms

Caution, care, and proactive behaviour are key when preventing and reacting to identify theft.

6. Protect Your Property When It’s Empty, or You Are Overseas

Fraudsters can take advantage of unattended properties to provide showings for prospective buyers. Here are some tips for ensuring its security if you will be leaving your property:

  • Get to know your neighbours and ask them to let you know of any suspicious activity
  • Install a security system with a 24/7 emergency response service from a security company
  • Set up a Ring doorbell with a camera that notifies you when anyone is at the door
  • Have someone regularly visit your home such as a friend, property management company, or hire a professional housesitter
  • Avoid posting on social media that you are away from your home
  • Use light timers or smart home technology to give the appearance that people are home

7. Take care when renting out your property

If you are renting your property out, one of the best ways to protect your property is by carefully screening potential tenants by verifying their identity, employment, rental history, and credit scores. 

Make sure you also have a lease agreement and avoid cash payments, CashApp, and wire transfers, which scammers all prefer.

A good property management company will manage all of this for you and conduct regular inspections to check the property is being used and maintained as intended.

Finally, don’t have your mail sent to your rental property, as it may provide the information needed for identity theft.

Let’s Get Your Title Insurance Organized

I hope you’ve found the steps in this article helpful for protecting your title, identity, and property from fraudsters. 

The next best step is to get the low-cost title insurance, which we can set up for you.  If you don’t have a mortgage, you may also want to consider pulling the Duplicate Indefeasible Title.

To move forward on any of these options or ask any questions about what you see here, please get in touch now by calling 604 685 7786, filling in our contact form, or emailing David directly.

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how to protect your family as you age header

How to Protect Your Family As You Age

Age isn’t quite what it used to be. 

60 is the new 50, 80 is the new 70. There’s been a considerable amount of talk in the media about “miracle” technological advances that cure all types of ailments and promise to keep us alive well into the triple digits. 

There’s no doubt that some of these advances are real and are actually extending and improving our lives, but there’s one thing they’ll never be able to change: accidents still happen, especially as we age.

According to a report by the Canadian Medical Association, nearly three-quarters of Canadians over 65 have at least one chronic health condition, and unexpected accidents like falls remain a leading cause of hospitalizations for people over 60.

Despite these staggering statistics, many people remain unprepared to deal with what could happen to them and their families if they suddenly become incapacitated by an accident or illness, or when they die. 

Recent polls show that the majority of Canadian adults lack basic estate documents such as wills, representation agreements, or powers of attorney. And, many of those who have them need to update their documents for them to remain legally binding. 

As you get older, not thinking about the very real possibility that something could happen to you means you are putting an unfair burden on your family and leaving them exposed to a number of headaches and responsibilities. 

So what can you do to remedy that? Here are five things you can do right now to protect your family as you age.

1. Write (or update) a Will

Wills are extremely important documents. If you don’t have one (or if things have changed since you wrote it or you’re not sure what’s in it or where it is) you should definitely consider getting one (or a new one) as soon as possible.

Wills allow you to express how you want your estate to be divided and help keep an inventory of what you own. This provides a HUGE help for your family and takes the burden of many decisions off of their shoulders.

Perhaps more importantly, wills allow you to select someone you trust to be in charge of executing your wishes. This helps guarantee that your wishes are actually carried out after you die, and helps organize the division of your stuff once you are gone.

2. Write a Power of Attorney Document

Power of attorney documents allow you to authorize someone else to sign financial or legal documents and act on your behalf. This can also be used to buy and sell assets, and sign tax returns if you are unavailable or incapacitated. 

There are two types of power of attorney. While a specific power of attorney is limited to a single transaction, an enduring general power of attorney allows you to choose someone who will take control of all your legal and financial matters if something were to happen to you.

In addition to this, it is a smart thing to do if you are in the early stages of Alzheimer’s, other forms of dementia, or degenerative diseases and believe that you may need help managing your daily finances now or in the future.

One small note, a power of attorney doesn’t apply to health care decisions (you’ll need a Representation Agreement for that).

how to protect your family as you age checklist header

3. Get a Representation Agreement

Representation Agreements are legal documents that allow a person (or a group of people) to make personal care and health decisions on your behalf.

This allows someone you trust to manage your affairs if you are incapacitated or unable to make your own decisions due to illness, injury, or disability. It also allows you to dictate your specific wishes regarding your physical, emotional and personal needs, including:

  • Choosing who will advocate for you
  • Giving or withholding consent for medical treatments
  • Where you will live (and with whom)
  • Whether to admit or discharge you from a care facility
  • Planning of support and services
  • Who has visitation rights
  • Care staff management
  • Spiritual matters
  • Whether you want to refuse CPR or have a Do Not Resuscitate (DNR)
  • End of life decision making
  • Diet and grooming
  • Care of pets
  • Participation in activities and exercise

Without a Representation Agreement, a doctor or health care provider will choose your Temporary Substitute Decision Maker (TSDM) if you can’t make your own decisions.

This person is selected based on the Health Care Consent Act. Your spouse would be the first choice, followed by one of your children.

Your TSDM is required by law to make decisions based on your best interests. However, this person may not necessarily be the person you want, or may not know what type of care or treatment you would prefer.

A Representation Agreement allows you to choose in advance who you want to represent you. Most people choose a spouse, partner, friend or family member in their representation agreement. 

The representative’s main responsibility is to assist a person to make a decision for themselves. This means that before making any decision, the representative is legally obligated to try to determine your current wishes.

If you are completely incapacitated and your current wishes cannot be determined, then your representative will follow what has been outlined in your Representation Agreement.

As a last resort, the representative will make a decision based on what they think is in your best interest while consistent with your values.

4. Get rid of some of your stuff!

Most people tend to accumulate lots of things throughout their lives. While some of these things may hold sentimental value, they also tend to pile up in basements, attics, and closets and are a hassle to deal with as we get older (not to mention a nightmare for those left to do it after you pass).

Downsizing isn’t as easy as “just getting rid of some stuff”. Letting go of your things can be difficult, but it can also be a very liberating process and one that your family (and future you!) will definitely appreciate.

Going over your things with your family members (especially your kids) is a great way to get the ball rolling on downsizing.

5. Get some legal help!

According to the BC Wills, Estates and Succession Act and the BC Wills Variation Act, which legislate estate succession in British Columbia, there are a number of reasons why your estate documents may be deemed invalid by a court.

For example, there could be undo interference (which is when someone influences the writing of another person’s will); formal invalidity (when proper processes aren’t followed); or a lack of testamentary capacity (when someone doesn’t have the mental capacity to legally sign a will).

Regardless of the reason, if a judge declares that a will is invalid, it’s essentially thrown away.

Draftinging or reviewing your documents with a BC Notary can help to ensure your wishes are followed and documents stand up to scrutiny.

The bottom line: if you haven’t created or reviewed your legal documents lately, now is the perfect time!

About David Watts

David Watts is a BC Notary who has practiced in Downtown Vancouver since 2006.  David’s office specializes in working with people to create their Wills, Power of Attorney and Representation Agreements; as well as performing Real Estate Transfers for properties all around British Columbia.  David has trained to receive the Certified Professional Consultant on Aging (CPCA) designation. David has been long-serving Director of the Society of Notaries Public of British Columbia and is currently 2nd Vice President.

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Welcome BlueShore Financial To The David Watts’ Team!

We are excited to announce that BlueShore Financial is now working with David Watts Notary as a mortgage lender.

It’s an exciting week for BlueShore Financial as they open their new downtown Vancouver branch, just a few blocks from our office.

What we love about BlueShore is they aren’t your average financial institution – they think differently. One example of this is they have built a unique Financial Spa® which designed to create a calming and relaxing environment. Their branch has soothing sounds of their waterfall, soft lighting, comfortable seating and refreshments. They even sell spa products such as lotions and soaps with proceeds going to BC Children’s hospital.

Blue Shore Financial Spa

You can take a virtual tour of their Financial Spa® here.

We also love that they are a Vancouver-based credit union who donates 1% of their pre-tax profits to local charities and not-for-profits in the local community. Wishbank, one of their impressive programs is a financial literacy program for kids delivered in local schools.

BlueShore Financial will be working with us to provide mortgage solutions. Some features of their mortgages include:

  • Flexibility – choose the right term, from 6 months to 10 years, and the right amortization (as long as 30 years).
  • Multiple payment options – Choose weekly, bi-weekly, semi-monthly or monthly payments to suit your cash flow. Up to 15% of the original principal can be paid down each year on the mortgage anniversary date. Also, scheduled payments can be increased, on an ongoing basis, by up to 15% once each calendar year.
  • Custom built – If a listed mortgage option doesn’t seem to be what you need, they can build the ideal mortgage solution for you.
  • Portable – Take your mortgage with you when you purchase a new home (with qualification).
  • Assumable – Transfer your mortgage terms to the buyer when you sell (with qualification).
  • Waived legal fees – If you borrow additional funds or choose another BlueShore Financial mortgage, you pay no additional legal fees.
  • Extended financing – Up to 80% of property value or up to 95% if insured by CMHC, with down payments as low as 5%.

If you are interested in finding out more, phone or email, we’ll be happy to discuss.

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5 Most Common Mistakes First Time Buyers Make

5 Most Common Mistakes First Time Buyers Make When Purchasing Real Estate in Vancouver

Buying a new home can be one of the most exciting times of your life, but it can also be rather stressful.

Not only does it mean making a huge financial investment, but it also requires that you make a number of decisions that will impact your life for years to come. This is especially true in Vancouver, where a red hot market, enhanced mortgage rules and new government regulations add extra pressure to the process of purchasing a home.

In this context, understanding the buying process and learning from people who have previously purchased properties in the city are great ways to make the process of buying a house a little bit easier.

That’s why we’ve put together a list to help you avoid making common mistakes when the time comes to buy a new place.

1. Looking around before you get a mortgage pre-approved

Many people start their search for a new home by going onto the Internet, visiting their bank’s website, and using a basic calculator to get an estimate of their mortgage. 

We highly recommend that you do not do this. 

There tends to be a pretty big difference between what the calculator tells you your mortgage will be and what it ends up being in reality. 

That’s why we believe that it’s critical to have your loan pre-approved (not just pre-qualified) before you even start searching for a home. This will give you a better idea of how much house you can actually afford, whilst also showing sellers and real-estate agents that you’re serious about purchasing.

2. Choosing a bad mortgage

In your urge to start seeing new homes, you may be tempted to accept the first mortgage offered to you–but this is probably not a good idea.

Before you start looking at homes, it’s critical that you actually get a mortgage plan that is right for you. While doing this isn’t easy, it will help guarantee that you are purchasing a home that’s really within your means, which is crucial for long-term financial stability.

That’s why we recommend that you shop around before settling on a mortgage. Try out a few different banks; or better yet, hire a mortgage broker that will help you figure out how much you can truly afford, determine what the best mortgage product is for you, and compare options that help you save money.

3. Not using a realtor

Many home buyers make the mistake of trying to fly solo when looking to purchase a home.

While they may have read some articles and done good research about the home purchasing process, they are in no way qualified to do this on their own. 

That’s why we always recommend that buyers hire a real estate agent to help them throughout the purchasing process. Real estate agents will help you find homes that are within your means, negotiate contracts, and provide support every step of the way.

That’s why it’s critical to find a real estate agent that can help you make a smart purchase.

Wondering how to find a real estate agent that will help you purchase your next home? Make sure you read our post on choosing the right real estate agent for you.

4. Making a “Fed Up” Purchase

One big mistake home buyers make — especially those flying solo — is buying properties out of desperation.

These people tend to buy something that’s barely “good enough” for them, rather than something that really suits their needs, just because they’re sick of the emotional rollercoaster of searching for homes.

While this may seem tempting at the time, it is a terrible idea. Remember, you’ll probably be at your new home for several years so it’s important that you purchase something that will make you happy.

Rather than buying out of frustration, stop looking for a while, or heed our advice and hire a real estate agent that can help you look for properties that tick the boxes you are looking for.

5. Forgetting about closing costs

Not budgeting properly for closing costs is one of the most common mistakes buyers make when purchasing property in Vancouver. 

Whether you’re a first time homebuyer or an experienced purchaser, you need to learn about closing costs–and budget for them properly. Not doing this can land you in a heap of financial trouble and can put the approval of your mortgage at risk.

A few months back I put together a comprehensive guide on closing costs for first time buyers. I highly recommend that all buyers take a look at it. The guide provides great detail about the following closing costs:

  • Mortgage application fee
  • Mortgage default insurance
  • Appraisal fee
  • Survey fee
  • Title insurance
  • Property Transfer Tax
  • Property tax and municipal utilities
  • GST
  • Foreign buyer’s property tax
  • Home inspection fees
  • Legal closing fees
  • Land title registration fee

Avoid common mistakes by getting help from a Notary Public

BC Notaries provide conveyancing and other legal services on more than half of all real estate transactions in B.C. and are highly trained and experienced in both simple and complex real estate transactions.

By giving you professional legal guidance on the purchase of a home, notaries will help you navigate through this often daunting process and help make it much easier for all buyers.

Want to know more? Get in touch now.

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9 Critical Reasons You Shouldn't DIY A Will

9 Critical Reasons You Shouldn’t DIY a Will

People who know me know I’m not a DIY fan.

It’s empowering to do something yourself. There is a satisfying sense of accomplishment that comes with the successful completion of a project. I also love cutting costs by doing things on my own, and often learn new skills in the process.

But even an avid DIY fan like me knows that there are some things that I simply can’t do by myself.  I also know the value of working with a professional.

Some of them are obvious. Like open-heart surgery or building an aircraft.

But others aren’t so straightforward, like legal documents. Even as an experienced BC Notary, I know there are certain legal documents that I can’t prepare on my own. I accept that and defer to other experts when I need these documents.

This is why I’m concerned about a growing trend: people wanting to DIY their Wills (often using the internet as their only source of information).

Don’t get me wrong, I understand the appeal: cutting costs, avoiding the hassle of having to see a professional, the satisfaction of learning a new skill. These reasons are valid, but trust me when I say, it’s just not worth it.

In the best of cases, DIY Wills are often ineffective, and seriously hinder the chances that your wishes are followed.

In the worst of cases, they are deemed invalid by the courts and leave your loved ones scrambling to figure out what to do with your estate.

The final decision to DYI your Will is yours to make, but at least you won’t be able to say that I didn’t warn you…

1. It May Affect the Validity of Your Will

In B.C. and in many other jurisdictions across Canada and the United States, certain formal elements must be in place in order for a will to be valid. If the procedures aren’t followed correctly, then the whole will is deemed invalid.

There are legalities to consider, and you’ll need to make some difficult decisions about the future of your estate. It’s advisable to have an expert that can help you understand the legal consequences of your decisions.

2. You May Choose the Wrong Executors or Guardians

Executors play a central role in the administration of a will. Without good executors, the final division of your estate can cause huge headaches to everyone involved. Guardians take care of our Children should we not be there.  Should they be the same person? Do you know why it’s good for them to be different people? Have you thought about checks and balances?

DIY-ing your Will may lead you to make bad or inappropriate choices about executors and guardians.

3. How Much Do You Know About Taxes Anyway?

Many people forget that taxation plays a central role in estate planning and wills drafting. When a BC Notary drafts a will, they can tell you what type of taxes a person will have to pay in estate and transfer taxes, giving you the information to adequately divide your estate.

Without understanding how taxes work and what role they plan in estate transfers, there’s a chance you may be burdening your loved ones with heavy taxes.

4. When It Comes to Wills, One Size Does Not Fit All

In general, DIY legal service providers create one will template, but not everybody’s situation is the same. BC Notaries create a will to meet your estate needs, personalizing your will so that it is both valid and effective.

DIY Wills Are Can Be More Expensive Than You Expect

5. Assets May Not Be Net Assets (Mortgages and Taxes)

Whenever you write a Will with the assistance of a legal professional, you are walked through a series of questions that help you account for the totality of your estate.

Only once your estate is properly assessed, will a Will be drafted to divide your estate as you see fit. DIY-ing you Will may cause your assets to be divided differently then you wished because they are not properly accounted for.

6. Mistakes Can Cost a Fortune (Literally)

The whole point of making a Will in the first place is to decide what you want to do with your estate. Whether it’s big or small, your estate comprises of the fortune that you were able to build over your lifetime.

DIY legal service sites can make it sounds like creating a Will is simple. But it isn’t. And mistakes cost money. In fact, ineffective wills can end up costing your family thousands of dollars in legal fees down the road. That can mean that your fortune — big or small — can end up going to covering those fees rather than to your loved ones.

7. Your Intentions May Not Be as Clearly Stated as You Think

No matter how much research you do, you probably don’t speak legalize, (which is how I call the oh-so-complicated language of the law). So even though you (and other normal humans) think that your Will is clear, without proper training, there’s a good chance that your wishes may not be clear for the law.

If this happens a court case is required to determine the correct meaning of the Will, costing your family their precious money and time.

8. You Don’t Get to Talk Through Your Estate Plan

One of the big benefits of working with a BC Notary is that you get to discuss your estate plan, ask questions, and get advice about the best way to structure things.  

Our experience makes the process much easier to work through.  Common feedback we hear is that “that was much easier than I expected”.  We also hear that “I feel like a heavy load has been lifted from me”.

Let us do the heavy lifting. You’ll feel better having these important details sorted out.

9. Learn about Powers of Attorney or Representation Agreements

BC Notaries can help with Wills, but we also prepare and advise on Powers of Attorney and Representation Agreements.  

For a complete estate plan and to provide full protection; it’s important to discuss if a Power of Attorney and/or Representation Agreement is something you can consider and learn about when working with a professional as opposed to a DIY wills kit.

Create A Valid Will

At David Watts, Notary Public, we can help you write your Will.

We have more than a decade of experience helping people with their estate planning and can give you the advice you need to write a valid and effective Will.

Get in touch and we’ll make sure your Will reflects your wishes. 

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