Notice to lawyers
February 28, 2023

Real estate identity frauds have reportedly surged in Ontario, and although we have not seen a similar surge in BC, lawyers need to be on alert. These frauds are sophisticated and not easily detected, if detectable at all.

In an identity scam, multiple fraudsters may be working together to participate as different parties to a transaction. The vendor, the buyer, the borrower, the mortgage broker, the realtor and/or a private lender could all be involved in the fraud. They often involve identity theft, imposters and highly credible fake or forged documents and ID.  A common fraud we have seen is where the fraudster finds a property and poses as the owner. They then either secure mortgage financing from a lender or sell the property to an innocent third party. Once the mortgage funds or property proceeds are received, the fraudster disappears and the money is gone.

Here are some interesting real estate identity fraud facts from our recent claim files:

  • While the fraud can happen in any context, almost all imposters posing as owners claim to be off-shore property owners.
  • Rental and vacant properties are particularly vulnerable targets.
  • Many similar or related transactions involve the same property.
  • The client does not require title insurance despite a significant loan, or title insurance has been declined.
  • The transaction must be completed in a rush.
  • Something does not look quite right with the ID and documents, for example:
    • Photographs in the passport and driver’s licence are of two different people.
    • Signatures are different.
    • Passport and driver’s licence expire on the same date.
    • Photographs in the IDs are the same although they were supposedly taken 10 years apart.
    • Picture ID does not match the borrower who you just met in your office.
    • The person is smiling in their ID (not allowed in government ID).

Even the most diligent lawyer can be duped. What can you do? Carefully verify your client’s identity for real estate transactions and loan transactions. Be on the lookout for anything suspicious and keep your guard up—ask yourself, does this transaction pass the “smell test”? Be particularly wary of funds being paid to third parties who are not related to the transaction.

When in doubt insist on getting the evidence you need to put your mind at ease. You may want to use the “drop test,” as a real driver’s licence will produce a “tinny” sound when dropped on a hard surface. If a mortgage broker is involved and you have doubts about the authenticity of the broker, consider checking the BC Financial Services Authority’s records to see if they are currently registered under the Mortgage Brokers Act as required by law.

For more resources, including tips to help keep you safe, see Real estate: Value, identity and other fraudsPrivate Lending (April 2019 Discipline Advisory), Real estate transactions – know your client primer (Summer 2021 Benchers’ Bulletin) and the Client ID & Verification web page. If you have questions about these types of scams or verifying your client’s identity, contact Practice Advisor Barbara Buchanan, KC ( or 604.697.5816).

For the latest updates from LIF, follow us on Twitter @Lifbc.