Is your cottage putting you at risk of title fraud?
Jul 6th, 2023 | By FCT
From opening weekend until you close for the winter, there’s no place quite like your cottage. You invest so much work into maintaining the property and protecting it from the elements. But there’s another danger facing your cottage that’s harder to prepare for: title fraud.
How does title fraud work?
Title fraud is when someone poses as you and steals equity from your property. A fraudster will usually do this by taking out a mortgage on your property or selling it to an innocent buyer. In B.C., if a fraudster sells your property, the buyer gets to keep it, while in Ontario, you retain ownership. Even if you don’t lose your cottage, it can easily cost you thousands of dollars to restore your title.
Find out more about title fraud and how FCT protects homeowners.
Why would fraudsters target cottages?
Fraudsters prefer vacant or regularly unoccupied properties, and your cottage fits that bill. Even if your buildings are winterized and you go throughout the year, fraudsters can still take advantage because:
Unoccupied properties are easier to access
If a fraudster knows your schedule, they can time their move for when the property is vacant. The more access they can get, the easier and safer it is for them to succeed.
Just being able to take some pictures of the property gives fraudsters an edge. They want to complete their sale as quickly as possible, which is easier if they list the property with photos.
Does your cottage double as a short-term rental? Fraudsters can book it to get access to the building, stage “their” property and show prospective buyers around.
It’s harder to spot the warning signs
In one recent title fraud case, the owners were on an extended business trip. A fraudster allegedly took advantage of that absence to sell their home from under them. The owners only found out when a neighbour called them, questioning activity on their property.
If your cottage is being sold while you’re away, how will you know? You’re not there to see the “for sale” sign go up, or potential buyers checking out the property. The more remote the cottage, the better—no nearby neighbours to spot unusual activity.
What can you do to protect your cottage from title fraud?
Your best protection is title insurance from FCT because we don’t just cover fraud, we work to prevent it. Our underwriting team identifies hundreds of millions in suspicious deals every year by looking for the red flags we’ve learned over three decades. If a fraudster succeeds, we take responsibility for managing the process and legal bills. You don’t need to worry about the cost and stress of restoring your title.
Getting title insurance protection is fast, easy and affordable. Looking to buy a cottage? Make sure to talk to your legal professional about FCT title insurance as part of closing on it. If the cottage you’re buying is being sold to you fraudulently, you’re going to need that protection.
Even if you or your family have owned the cottage for years, it’s not too late. An Existing Homeowner’s Policy provides coverage that goes back to the date the cottage was purchased. Don’t wait for your cottage to become a target—get protected today.
Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.
®Registered Trademark of First American Financial Corporation.