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Title fraud is a scheme in which a fraudster uses stolen personal information or forged documents to transfer a property's title, or register a mortgage against it, without the real owner's knowledge or consent.
Title fraud is almost always preceded by identity theft: the fraudster impersonates the owner using forged or stolen identification to convince a lender or buyer they have authority over the property, then either registers a new mortgage and disappears with the funds or, less often, sells the property outright. The real owner may not discover the fraud until a default notice or an unexpected mortgage statement arrives.
Title insurance is the standard protection against this risk, typically covering the legal costs of striking the fraudulent registration and restoring clear title, including a duty to defend the owner in court if needed. Brokers and lawyers reduce the risk further through rigorous client identity verification at intake, and extra diligence is warranted on vacant, rental, or mortgage-free properties, which are common fraud targets.
Usually preceded by identity theft: a fraudster typically needs to convincingly impersonate the real owner using forged or stolen identification before they can act on title.
Distinct from mortgage fraud: link mortgage fraud — title fraud targets the ownership record itself, while mortgage fraud usually involves misrepresentation inside an otherwise legitimate-looking application.
Title insurance is the standard protection: a title insurance policy typically covers the legal costs of investigating the fraud and restoring clear title, including a duty to defend the owner in court if needed.
Vacant and mortgage-free properties are common targets: fraudsters often target properties that are unoccupied, rented out, or owned outright, since there's no resident owner or existing lender likely to notice quickly.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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