At the outset of the pandemic, workforces across the country were required to transition to remote work with very little time to prepare.
While most businesses recognized the importance of digital transformation prior to the pandemic, the need to adapt to the technology solutions available – and in some cases develop new solutions – was significantly expedited by the circumstances presented by COVID-19.
While this evolution brings many benefits, it also perpetuates the fears that online processes could create more opportunities for fraudsters. In the real estate industry, the primary concern has been whether the new virtual nature of deals would introduce additional risk or new avenues for fraud.
There is no strong evidence, as of yet, to indicate that fraud has increased within the industry due to the pandemic and the increased use of digital solutions.
However, for the foreseeable future it is vitally important for real estate professionals and lenders to take the necessary steps to prevent and mitigate against the potential for fraud in this virtual environment.
In recognition of Fraud Prevention Month, we’ve provided an overview of some types of fraud and what to watch for to help stakeholders take the right steps to protect themselves and others involved throughout the real estate transaction.
Types of fraud
In order to understand how to prevent fraud, it’s important to first understand the most common types of fraud perpetrated on the real estate industry in Canada. These include:
Title fraud: Occurs when the ownership or title of a property is fraudulently transferred, or documents are forged to allow a fraudster to illegally sell or refinance the property.
Mortgage fraud: Occurs when an individual intentionally provides inaccurate, fraudulent or incomplete information to a lender in order to secure a mortgage for which they might not otherwise qualify.
Value fraud: Occurs when a lender is led to believe a property is of higher value than it really is through concealment or intentional misrepresentation of the property’s attributes and value.
Wire fraud: Occurs when a fraudster is monitoring a particular transaction and shortly before closing hacks into the email chain and amends wiring instructions for funds.
Preventing fraud
Perhaps more important than understanding different types of fraud is taking the precautions to prevent them. The below recommendations will help real estate professionals detect some of the common red flags involved in a real estate transaction.
First, always insist that the balance of the proceeds is payable to the registered owners after payment of secured creditors, and not to third parties. If the borrower owes money to a third party that does not appear to be related to the transaction, suggest they deposit the balance of the proceeds into their bank account and make payments from there.
Second, take all possible precautions to verify identity. Most fraudsters go to solicitors who don’t know them and try to rush the transaction in hopes that red flags may go unnoticed. Be sure to review the identity, age and income of clients,as well as the addresses on the application, including whether or not the buyer currently resides at the property they are purchasing.
Lastly, be sure to question transactions being signed under power of attorney. Forged powers of attorney can be used by a fraudster claiming to represent the owner of a property, so it’s important to review the power of attorney very carefully.
Consider title insurance
A title insurance policy protects residential and commercial property owners and their lenders against loss resulting from fraud within the transaction as well as some coverage for future fraudulent events. Differences exist between the residential and commercial coverages, particularly with respect to fraud that occurs in the future.
Title insurance companies are there to act as a second set of eyes and help to prevent fraudulent transactions by ensuring any red flags are raised and investigated by experienced and highly skilled underwriters.
Due to the vast volume of transactions they are involved in, some title insurance companies can provide the most up-to-date source of information on new methods of fraud attempts. And at a time when more and more real estate professionals are relying on digitization and virtual closings, it’s good to have that experience and expertise in your corner.
Remaining vigilant
Real estate professionals and all stakeholders involved in a real estate transaction must do their due diligence to protect against fraudsters.
While digital processes and virtual solutions are becoming more advanced, professionals must remember that the sophistication of fraudsters is increasing as well. Underestimating their capacity to evolve and be creative could be debilitating for both their business and their clients.
At FCT, we take fraud very seriously and strive to both detect it and prevent it. We can also provide coverage for owners and lenders if it occurs. We’re invested in doing our part to help alleviate some of the worries that come from these uncertain times and encourage all real estate professionals to remain vigilant.
The more we work together as an industry, the higher the likelihood we can prevent and mitigate fraud.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
