Land Titles Assurance Fund: Claiming Compensation in Ontario

Finding out that someone has sold your property, or borrowed against it, using a forged or fraudulent document is frightening. Many owners assume that once a document is on the land register, it is final. In Ontario, that is not always true when fraud is involved.

This article explains the main protections: how a fraudulent registration is treated, how the register can be corrected, and how the Land Titles Assurance Fund can compensate some people who lose land. It also covers first steps, checking your own records, and how optional title insurance compares. Every situation turns on its own facts, so a lawyer can confirm how this applies to you.

A fraudulent registration is treated differently

Normally, a registered instrument is effective as part of the land register. That usual rule does not apply to a fraudulent instrument registered on or after October 19, 2006 (Land Titles Act s. 78(4.1)).

In plain words, a forged transfer or mortgage registered after that date does not gain legal force simply because it made it onto the register. Whether a particular document was fraudulent, and what that means for later buyers or lenders, is a question of fact that a lawyer can assess.

How the register can be corrected

Under Land Titles Act s. 57(13), the Director of Titles or a court may rectify the register in certain situations. Those include:

• where a fraudulent instrument was registered on or after October 19, 2006
• where a registered instrument would be absolutely void if it were unregistered
• to correct an error that would deprive someone of land they legally possess

Rectifying the register is something the Director of Titles or a court may do. Compensation is a different step: a person wrongfully deprived of land through fraud or a registration error may apply to the Director of Titles. Which route fits your situation depends on the facts, so it is worth confirming with a lawyer.

Who can claim from the Land Titles Assurance Fund

A person who has been wrongfully deprived of land through fraud or a registration error may apply for compensation to the Director of Titles. The application must be made within six years of suffering the loss (Land Titles Act s. 57(5.1)).

A Hearings Officer decides both whether you are eligible and how much you may receive. No typical payout can be assumed, because the amount depends on the facts of each claim.

Because the six-year clock runs from the loss, do not wait to see whether the register gets fixed first. A lawyer can help you work out when your loss occurred and what to include in the application.

First steps if you are a victim of title fraud

Ontario advises victims of real estate fraud to take these steps:

• Report the fraud to your local police.
• Get legal advice.
• Contact the Land Registry Office where the property is registered.
• Speak with your bank.
• Ask Equifax Canada and TransUnion Canada for a free security freeze.

Keep copies of everything: letters, emails, police report numbers, and the registered documents. They will help with any rectification request or compensation application.

Checking your records and protecting yourself

Ontario's land registry is online only and holds the official ownership records for more than 7.4 million parcels. ServiceOntario reviews and certifies registrations, but it cannot search records, give legal advice or explain any property's records. Anyone can search, view and download current and historical property records, such as a parcel register, through OnLand for a fee.

Documents are registered electronically through Teraview by authorized account holders. Authorization to register land documents is free to apply for, and applicants must provide 2 pieces of identification to guard against identity theft and real estate fraud.

Title insurance is optional in Ontario, and residential coverage lasts as long as you own the property. Policy wording varies, so read exclusions carefully and ask a lawyer if you are unsure.

What to do next

• Order your parcel register through OnLand and compare it with your own documents.
• Work through Ontario's first-step list above without delay.
• Write down the date you first learned of or suffered the loss, because the six-year deadline is measured from the loss.
• Speak with a lawyer about rectification, a Fund application, and any claim against others involved.

Frequently asked questions