How do real estate agents verify the identity of buyers and sellers?
That’s a very timely question, given the recent news stories about the unauthorized sale of properties arising from identity theft.
Identity theft is always a serious crime, but when it occurs during a real estate transaction it is even more alarming since someone’s home is at stake and the amount of money involved is so large. Fraud of this kind, known as title fraud, is when someone uses fake or stolen documents to transfer ownership of a home they do not own to their name, and then tries to sell the property or apply for a mortgage on it. If the fraud is successful and they are able to get the money, they disappear and the homeowner is left without a home or with a mortgage they didn’t authorize.
Real estate agents are required by law to confirm that the parties in a transaction are who they say they are. They must follow the guidelines set out and overseen by the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC. For more information visit FINTRAC’s website.
The most common method of verifying a person’s identity is by using a process to ensure that the government-issued photo identification presented is valid and checking that the photo looks like the individual presenting it. Real estate agents must also be vigilant for anything that seems suspicious and check public land registry information to confirm ownership of the home.
Real estate agents are to be wary of any inconsistencies, such as misspellings and errors when the buyer or seller writes their name and email address. If they notice discrepancies, they are expected to ask follow-up questions, to assure themselves of the person’s identity. For example, as part of the selling process, they would typically inquire about many aspects of the property and should look for inconsistencies, inaccurate or unknown information about the property.
While agents are required to take steps to help prevent identity theft, you – as a consumer – can also take certain practical steps to protect your identity. Some of these include:
If you think your identity might have been stolen, file a report with your local police service, contact your financial institution, credit card company, both national credit bureaus (Equifax Canada and TransUnion Canada), and the Canadian Anti-Fraud Centre. Anyone with evidence of an identity theft crime involving the buying or selling of a property in Ontario should contact the Real Estate Council of Ontario. If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca. This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.
