February 14, 2023
Registrants are required to verify that the parties in a transaction are who they say they are, in accordance with the Trust in Real Estate Services Act, 2002 (TRESA) and, more particularly, the Code of Ethics.
Identity theft occurs when a fraudster assumes a person’s identity using both public and private information. Since real estate is so valuable, it can be a prime target for sophisticated criminals. Once the fraudster has assumed a property owner’s identity, they can then attempt to sell or remortgage the owner’s property without the owner’s knowledge. This may involve misleading a registrant, a lawyer, or other professionals while carrying out the fraud.
You can verify an individual’s identity using a variety of methods, depending on the circumstances.
Be vigilant for any inconsistencies, such as spelling errors when the buyer or seller writes their name or email address, or other odd or unusual mistakes.
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. Ask them to produce invoices for work done, utility and property tax bills, or other documents a homeowner would have.
Other concerns might arise if the homeowner appears to be looking for a quick sale and closing or an unusually low sale price or readiness to accept a low offer for no valid reason.
If you have any suspicions, ask qualifying questions, such as when the person bought the home and who their real estate agent was in the purchase. That information would be available if the home was listed through the MLS® the last time it was sold.
If they fail some of these small checks, do further investigation and insist on additional identification sources.
Obligations for checking, verifying and record keeping of the identity of buyers and sellers are covered within the real estate education program and RECO’s mandatory continuing education (MCE) courses. More specifically, the FINTRAC course covers the following:
Registrants who fail to properly verify the identity of a client may face RECO disciplinary action or civil litigation by those affected by that failure. The maximum discipline fine for a registrant is $50,000, or they might also face suspension or revocation of their registration.
RECO will bring the full weight of the law to bear on any registrant involved in fraud and will cooperate with law enforcement in any criminal prosecution.