A Forged Power of Attorney Nearly Derails a Waterloo Sale

The situation

Kostas and Pratheep had outgrown their townhouse. With one more child on the way and both of their jobs keeping odd hours — Kostas worked as a real estate agent with evenings and weekends tied up showing other people's houses, and Pratheep worked shifts as a paramedic — they wanted more room and a shorter commute for both of them. After months of searching, they found it: a detached four-bedroom home in Waterloo, listed around $715,000, owned outright by a woman named Nirosha who had lived there with her husband for close to thirty years before his death the previous year.

The listing agent explained that Nirosha was downsizing to something smaller and easier to manage on her own, and that the sale proceeds were an important part of funding the next stage of her life. The home had no mortgage registered against it. Kostas and Pratheep made an offer, it was accepted, and Treadstone Law was retained to act for them on the purchase, handling the standard pre-closing work: a search of title through the province's electronic land registration system, a tax certificate, off-title inquiries with the municipality, and the usual review of the status of the property before closing funds changed hands.

What the search turned up

About three weeks before the scheduled closing, Treadstone ran the file's title search as part of routine pre-closing due diligence. The result did not match the listing. A new mortgage, in an amount of roughly $190,000, had been registered against the property only ten days earlier — well after Kostas and Pratheep's agreement of purchase and sale had been signed, and well after the listing had described the home as mortgage-free.

The registration named a private lender and referenced a power of attorney for property, a legal document under Ontario's Substitute Decisions Act, 1992 that lets one person authorize someone else to manage their financial and property affairs, typically used when the person granting it is unable or unwilling to handle the transaction personally. The document on file claimed to authorize a named individual to mortgage the property on Nirosha's behalf. Kostas, drawing on years of experience closing his own real estate deals, thought the timing was wrong the moment he saw it. A recently widowed owner about to sell a paid-off house has little reason to suddenly grant someone else authority to mortgage it for a six-figure sum ten days before that sale is set to close.

Treadstone raised the discrepancy with the listing brokerage the same day and asked for direct contact with Nirosha or a family member who could confirm whether the power of attorney was genuine. It was not. Nirosha's son, who had been helping his mother manage paperwork since his father's death, had never heard of the named attorney and confirmed that no power of attorney authorizing a mortgage had ever been signed. The document used to register the loan was a forgery, built from personal details — likely gathered from public land records and probate filings connected to her late husband's estate — convincing enough to satisfy a private lender's own verification process, but never seen or authorized by Nirosha herself.

This pattern is not unusual. Recently widowed or elderly owners of mortgage-free homes are a recurring target for this type of fraud, precisely because a paid-off property represents equity a fraudster can borrow against quickly, and because a life transition such as bereavement often means fewer people are watching the mail, the land registry, or unexpected financial paperwork closely. The fraud here did not touch Kostas and Pratheep's own money directly — it was registered against Nirosha's title before their purchase closed — but it stood directly in the way of the sale going through, since no lender would finance a purchase, and no responsible buyer's lawyer would allow a closing to proceed, with an unresolved and disputed mortgage sitting on title.

What we did

1. Flagged the registration date against the transaction timeline. Because the fraudulent mortgage was registered after the agreement of purchase and sale was signed but before closing, it was treated as a live obstacle to closing rather than a historical defect to insure around — the sale could not close with it still in place.
2. Connected the seller's family directly with the discrepancy. Treadstone contacted the listing brokerage and, through it, Nirosha's son, laying out exactly what had been registered and asking for immediate confirmation of whether any power of attorney had been granted. Getting a fast, direct answer from someone who actually knew Nirosha's affairs was the single most important step in the file.
3. Put the private lender on formal notice. Once the power of attorney was confirmed as forged, Treadstone advised the seller's lawyer, who in turn notified the private lender in writing that its registered mortgage was disputed as the product of fraud and that the sale could not close until it was removed from title.
4. Tracked the discharge process without letting the file drift. Removing a fraudulent registration from title in Ontario is not automatic. It generally requires either a negotiated discharge from the lender once the fraud is established, or an application to the Superior Court for an order removing the registration. Treadstone stayed in regular contact with the seller's lawyer through this process and kept Kostas and Pratheep updated in plain terms about what was happening and roughly how long it was likely to take.
5. Negotiated the closing delay directly with the seller's lawyer. With Kostas and Pratheep's own townhouse already sold and a moving date they could not simply cancel, Treadstone raised the practical cost of delay early rather than waiting until closing day, opening a conversation about how that cost should be shared once it became clear the fraud would take weeks, not days, to clear.
6. Confirmed a clean title before releasing closing funds. Once the fraudulent mortgage was formally discharged from the land registration system, Treadstone pulled an updated title search to confirm the property was clear before allowing the purchase to close.

The outcome

The fraudulent mortgage was discharged from title about five weeks after Treadstone first flagged it, following direct negotiation between the private lender and the seller's lawyer once the forged power of attorney was established. Nirosha never lost any equity in her home, and the private lender was left to pursue whoever had defrauded it, not the innocent seller whose identity had been used.

The closing itself moved back by roughly a month from the original date. That delay had a real cost. Kostas and Pratheep had already sold their townhouse and needed to move out, so they paid for five weeks of short-term rental housing and storage for their belongings while they waited, adding several thousand dollars of expense that a clean, on-time closing would never have created. Treadstone raised this directly with the seller's lawyer well before closing, and the two sides negotiated a closing credit — a reduction applied to the purchase price at closing — of roughly $4,500 toward those costs, paid from Nirosha's sale proceeds. It did not cover every dollar of the delay, and both sides knew that going in. Nirosha bore a real cost too, in a lower net amount from a sale she needed to fund her own next home, for a fraud that was not her fault any more than it was the buyers'. That is the honest shape of a partial resolution: nobody involved in the legitimate transaction caused the fraud, yet both the buyers and the seller absorbed part of its cost, because a full and immediate recovery from the actual fraudster was neither realistic nor quick enough to matter to people who needed to close and move on with their lives.

The sale ultimately closed on the revised date. Kostas and Pratheep got the home they had planned for, and Nirosha completed her move into smaller accommodations only a little later than intended. What made that possible was catching the fraud during routine pre-closing diligence, well before any funds moved and before the deal collapsed entirely — a very different, and much less painful, outcome than discovering a fraudulent registration after closing, when undoing it becomes someone's insurance claim rather than a negotiation between two parties who both still want the same deal to work.

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