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Get My Free Estimate →Since 19 October 2006, s. 78(4.1) of the Land Titles Act removes registration’s protective effect from a fraudulent instrument — but s. 78(4.2) preserves the effect of honest instruments registered after it. In practice the party who dealt directly with the fraudster bears the loss and the innocent party one step further along is protected. “Fraudulent instrument” is defined narrowly in s. 1 and is narrower than fraud. Where the loss cannot be recovered elsewhere, s. 57(4) allows compensation from the Land Titles Assurance Fund on four conditions, including one added in 2006 that most write-ups miss: the claimant must have “demonstrated the requisite due diligence as specified by the Director”. Applications go to the Director of Titles within six years. The Fund pays proven direct pecuniary loss only — a published decision refused mental anguish, medical costs and lost business opportunity, and another dismissed a claim entirely because a default judgment was not proof of the amount advanced.
In January 2023 a Toronto woman found out her condominium had been sold. She had not sold it. Someone using fake identification had let themselves into the vacant unit, staged photographs, listed it on 11 May for $978,000, completed a sale on 20 May for $970,000, and transferred title on 15 June to a buyer who registered a bank mortgage against it. She discovered this in July. The Director of Land Titles placed a caution on title on 31 August.
That is not a hypothetical and it is not rare enough to ignore. This page sets out how Ontario’s land titles system actually allocates the loss when a forged instrument is registered, what the Land Titles Assurance Fund does and does not pay, and the one statutory condition added in 2006 that most explainers of this subject still do not mention.
The scale, as far as it is knowable
| Figure | Source |
|---|---|
| “At least 30” GTA homes sold or mortgaged without their owners’ knowledge, per a private investigation firm retained by a title insurer | CBC News, 23 January 2023 |
| Title insurance industry estimate of roughly $200 million in fraud claims since late 2019 | CBC News, 23 January 2023 |
| Chicago Title Insurance Company alone: 80 or more mortgage fraud claims since late 2019 | CBC News, 23 January 2023 |
| “Stand-in” fraudsters paid $5,000 to $10,000 per job; targets are homes with no mortgage or high equity; proceeds usually moved out of the fraudulent accounts within seven days | CBC News, 23 January 2023 |
What I could not find is any current official number. Ontario publishes Land Titles Assurance Fund payments, but the published table stops at 30 April 2012 and no written decision has been published since 2010. So the province has published nothing covering the fraud wave that began in 2019. The figures above are industry and journalism, not government statistics, and I am labelling them as such.
Who bears the loss: deferred indefeasibility, and then the statute
People assume that because Ontario has a land titles register, whatever the register says is true. That is not how forgery is handled. There are two layers, and they were built at different times.
Layer one: the registration rule and its exception
Section 78(4) of the Land Titles Act is the general rule that makes the register work:
“When registered, an instrument shall be deemed to be embodied in the register and to be effective according to its nature and intent, and to create, transfer, charge or discharge, as the case requires, the land or estate or interest therein mentioned in the register.”
Then, added in 2006, the exception:
78(4.1) “Subsection (4) does not apply to a fraudulent instrument that is registered on or after October 19, 2006.”
78(4.2) “Nothing in subsection (4.1) invalidates the effect of a registered instrument that is not a fraudulent instrument described in that subsection, including instruments registered subsequent to such a fraudulent instrument.”
And s. 155: “Subject to this Act, a fraudulent instrument that, if unregistered, would be fraudulent and void is, despite registration, fraudulent and void in like manner.”
Read s. 78(4.1) with s. 78(4.2) together and you have the architecture. The forged instrument itself is stripped of registration’s protection. But the honest transaction that comes after it is not. That is the statutory expression of what lawyers call deferred indefeasibility: the person who dealt directly with the fraudster loses, and the innocent party one step further down the chain is protected.
Layer two: what actually counts as a “fraudulent instrument”
This is narrower than “fraud”, and the narrowness is the trap. Section 1 defines it as an instrument:
“(a) under which a fraudulent person purports to receive or transfer an estate or interest in land, (b) that is given under the purported authority of a power of attorney that is forged, (c) that is a transfer of a charge where the charge is given by a fraudulent person, or (d) that perpetrates a fraud as prescribed with respect to the estate or interest in land affected by the instrument”.
And a “fraudulent person” is one who executes or purports to execute an instrument where “(a) the person forged the instrument, (b) the person is a fictitious person, or (c) the person holds oneself out in the instrument to be, but knows that the person is not, the registered owner”.
Notice what is not in that list. A person who genuinely holds the office they claim to hold, and who signs a genuine document, is not a “fraudulent person” even where the underlying conduct is dishonest. Ontario courts have held that a mortgage granted by someone who had taken over a corporation’s directorship by fraud was not a fraudulent instrument, because the documents were authentic and the signer had apparent authority to bind the registered owner. Being defrauded and having a “fraudulent instrument” registered against you are two different things.
The Land Titles Assurance Fund
Where the loss cannot be recovered from the fraudster or anyone else, the province maintains a fund. Section 57(4) sets four conditions, and all four must be met:
| Condition | What s. 57(4) requires |
|---|---|
| (a) Wrongful deprivation from a listed cause | Deprivation of land or an interest in land by reason of the land being brought under the Act, the registration of a fraudulent instrument, or a misdescription, omission or other error in a certificate of ownership or an entry on the register attributable to an officer of a land registry office |
| (b) Due diligence | “the person has demonstrated the requisite due diligence as specified by the Director” where the deprivation is by reason of the registration of a fraudulent instrument |
| (c) Last resort | The person “is unable under subsection (1) or otherwise to recover just compensation for the person’s loss” |
| (d) In time | The application is made within the period in s. 57(5.1) |
Section 57(5.1) sets that period: an application must be made within six years of having suffered the loss, or, for a minor or a person incapable within the meaning of the Substitute Decisions Act, 1992, within six years of the minority or incapacity ceasing.
Paragraph (b) is the one to notice, and it is missing from most write-ups of this subject. Compensation for a fraud loss is conditional on the claimant having demonstrated due diligence, as specified by the Director of Titles. This is not the old law. Section 57(4) was rewritten by the 2006 fraud amendments and amended again in 2024, and any quotation of s. 57(4) you find online that reads as a single flowing sentence is quoting a version that has not been in force for nearly twenty years.
Also worth knowing: s. 57(3) protects a purchaser or mortgagee in good faith for valuable consideration from liability under s. 57(1) merely because their vendor or mortgagor was registered through fraud or error, or derived title from someone who was.
What the Fund actually pays — and refuses
Two published decisions show the shape of it better than any summary.
| Decision | Outcome |
|---|---|
| Raina, 22 February 2002 | A fraudster transferred title to himself, fraudulently discharged the bank’s charge and registered two new mortgages. He later pleaded guilty to 33 counts of fraud and received 38 months. The Fund paid $725,498.29 to discharge the two fraudulent charges, plus $3,000 in communication costs, $10,000 in legal costs, and roughly $54,800 to another party’s counsel, and title was rectified. It refused claims for mental anguish, medical costs, lost business opportunity and travel |
| J.W., 26 January 2010 | A charge was fraudulently discharged by a forged signature and the property refinanced and sold. The claim was dismissed with no award: the claimant could not prove the amount actually advanced, and a default judgment for $67,293.47 was held not to be proof of loss. The decision describes the Fund as “one of last resort for most claimants” |
The lesson from those two together: the Fund pays proven direct pecuniary loss tied to the wrongful deprivation. It does not pay for distress, and it does not accept a judgment as a substitute for proof of the money. The burden is on the claimant, and it is a real burden.
On process, Ontario states a service target of returning title and deciding compensation within three months for a straightforward fraud. Applications go to the Director of Titles. Appeals under the Act must be brought within 30 days of the decision or order.
Criminal consequences
Section 156(1) makes it an offence to fraudulently procure, or attempt to procure, a fraudulent entry on the register, an erasure or deletion from it, or an alteration of it. On conviction the penalty under s. 156(2) is a fine of not more than $50,000 or imprisonment for not more than two years less a day, or both, for an individual, and a fine of not more than $250,000 for a corporation. The court may also order compensation or restitution.
What actually protects an owner
| Protection | What it does | What it does not do |
|---|---|---|
| Title insurance | FSRA lists title fraud among the risks a residential owner policy covers. It is a one-time premium and, on the policies I read, it continues for as long as you hold an interest. This is the fastest practical route to being made whole | It is a contract with an insurer, with its own exclusions. It does not stop the fraud happening |
| The Land Titles Assurance Fund | A statutory backstop where recovery is not available elsewhere | Last resort, conditional on demonstrated due diligence, proven pecuniary loss only, six-year limit |
| A mortgage on the property | Not a protection anyone chooses, but worth understanding: the reporting is consistent that fraudsters target properties with no mortgage or high equity, because a discharge is one more forgery and one more party who might notice | |
| Watching your own property | Knowing when an instrument is registered against your title is the single most useful early warning, particularly for a vacant, tenanted or long-distance-owned property |
One thing I want to be careful about, because you will read the opposite elsewhere. I could not verify that Ontario offers any free government title-monitoring or owner-alert service. I looked. What exists is commercial monitoring, and the products I found were aimed at mortgage administrators rather than homeowners. If someone tells you to “sign up for Ontario’s free title alerts”, ask them for the link before you believe it.
The profile that gets targeted
From the reporting, consistently: a property with no mortgage or very high equity, and an owner who is not physically present — a vacant unit, a tenanted rental, a property owned by someone living abroad, an estate property between death and sale, a home whose owner is in long-term care. Each of those removes the person most likely to notice a for-sale sign or a stranger with a key.
Every one of those descriptions fits a large number of Etobicoke condominiums.
Own an Etobicoke property you do not live in?
A vacant unit, a tenanted rental, an estate property or a home owned from abroad is the exact profile the reporting describes as targeted. If you want a second set of eyes on a property you are not physically near, or you are buying and want the title position checked properly before you waive conditions, get in touch. This is a conversation for your lawyer too, and I will say so where it is.
connect@jatindua.com · 437-987-1925 · Book a free consultation
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Frequently asked questions
If a fraudster sells my house, do I lose it?
Generally not, where the forged instrument was registered on or after 19 October 2006. Section 78(4.1) of the Land Titles Act provides that the deeming rule in s. 78(4), which makes a registered instrument effective according to its nature and intent, does not apply to a fraudulent instrument registered on or after that date, and s. 155 provides that a fraudulent instrument that would be void if unregistered is void despite registration. The party who dealt directly with the fraudster is the one exposed. But s. 78(4.2) preserves the effect of instruments that are not themselves fraudulent, including ones registered after the fraudulent one, so the analysis depends on where in the chain each party sits.
What is a “fraudulent instrument” under the Act?
Section 1 of the Land Titles Act defines it as an instrument under which a fraudulent person purports to receive or transfer an interest in land, one given under the purported authority of a forged power of attorney, a transfer of a charge where the charge is given by a fraudulent person, or one that perpetrates a fraud as prescribed. A “fraudulent person” is one who forged the instrument, is a fictitious person, or holds themselves out in the instrument to be the registered owner while knowing they are not. This is narrower than fraud generally: Ontario courts have held that a mortgage granted by someone who obtained a corporation’s directorship dishonestly was not a fraudulent instrument, because the documents were authentic and the signer had apparent authority.
What is the Land Titles Assurance Fund?
A provincial fund that compensates people for certain financial losses caused by real estate fraud or land registration errors. Claims are made to the Director of Titles under s. 57 of the Land Titles Act. Section 57(4) sets four conditions: wrongful deprivation from one of the listed causes, demonstrated due diligence as specified by the Director where the cause is a fraudulent instrument, inability to recover just compensation otherwise, and an application made in time.
How long do I have to claim from the Fund?
Section 57(5.1) requires an application within six years from the time of having suffered the loss, or, for a minor or a person who is incapable as defined in the Substitute Decisions Act, 1992, within six years from the date the minority or incapacity ceased.
What does the Fund actually pay?
Proven direct pecuniary loss tied to the wrongful deprivation, together with reasonable legal and claim costs. In the Raina decision the Fund paid $725,498.29 to discharge two fraudulent charges plus costs, and rectified title, but expressly refused claims for mental anguish, medical costs, lost business opportunity and travel. In the J.W. decision the claim was dismissed with no award because the claimant could not prove the amount actually advanced, and a default judgment was held insufficient as proof. That decision describes the Fund as one of last resort for most claimants.
Is title insurance or the Assurance Fund the better protection?
They are different things and most owners in this position use the insurance first. Title insurance is a contract with an insurer that FSRA lists as covering title fraud, and a claim is made to the insurer. The Fund is a statutory backstop available where you are unable to recover just compensation otherwise, conditional on demonstrated due diligence, limited to proven pecuniary loss, and subject to a six-year limit. Having a policy does not stop the fraud; it changes how quickly you are made whole.
Does Ontario offer free title monitoring or owner alerts?
I could not verify that it does, and I looked. The monitoring products I found were commercial and aimed principally at mortgage administrators rather than homeowners. If you see advice telling you to sign up for a free provincial title alert service, ask for the link before relying on it. What Ontario does provide, once a fraud is identified, is the ability for the Director of Titles to place a caution on title, which is what happened in the reported Toronto condominium case.
What kind of property gets targeted?
The reporting is consistent: properties with no mortgage or high equity, and no one physically present. That means vacant units, tenanted rentals, properties owned by people living abroad, estate properties between death and sale, and homes whose owners are in long-term care. Each removes the person most likely to notice a listing, a lockbox or a stranger with a key. A large share of Etobicoke condominiums fit at least one of those descriptions.
What are the criminal penalties for title fraud in Ontario?
Under s. 156(1) of the Land Titles Act it is an offence to fraudulently procure or attempt to procure a fraudulent entry on the register, an erasure or deletion from it, or an alteration of it. Section 156(2) sets the penalty at a fine of not more than $50,000 or imprisonment for not more than two years less a day, or both, for an individual, and a fine of not more than $250,000 for a corporation. The court may also order compensation or restitution. These are separate from Criminal Code charges, and in the reported Toronto cases charges laid included fraud over $5,000, laundering proceeds of crime, personation with intent, and uttering a forged document.
Related reading
- Title insurance in Ontario: what it covers, what it does not
- Selling an inherited property in Ontario as estate trustee
- Power of sale in Ontario: the fifteen-day clock and the money waterfall
- Condo insurance in Ontario: the standard unit and the deductible chargeback
Sources
Every figure on this page traces to one of these, and each was read on 30 August 2026. Primary sources only — statute, regulation, and the government or agency that administers the rule. Where I could not verify something from a primary source, the page says so instead of guessing.
- Land Titles Act, R.S.O. 1990, c. L.5 — e-Laws consolidation. Official Ontario consolidation. Section 1 definitions of “fraudulent instrument” and “fraudulent person”, and sections 57, 78 and 155 to 156, each read in full on 30 August 2026. Note that s. 57(4) was substantially rewritten by 2006, c. 34 and amended again by 2024, c. 28 — older quotations of it circulating online are obsolete. Accessed 30 August 2026.
- Compensation for loss — Land Titles Assurance Fund. Government of Ontario, updated 10 April 2026. Describes the Fund, the claim route through the Director of Titles, and the six-year filing limit. Accessed 30 August 2026.
- Compensation for victims of real estate fraud. Government of Ontario, updated 30 June 2026. States a service target of returning title and deciding compensation within three months for a straightforward fraud, and gives the Director of Titles contact details. Accessed 30 August 2026.
- Land Titles Assurance Fund decisions. Government of Ontario, updated 10 April 2026. Publishes written decisions and a table of claims paid. The published payment table runs to 30 April 2012 and no written decision has been published since 2010. Accessed 30 August 2026.
- Land Titles Assurance Fund decision — Raina (PDF). Director of Titles, 22 February 2002. Awards totalling more than $790,000 following a fraudulent transfer and discharge; claims for mental anguish, medical costs, lost business opportunity and travel were refused. Accessed 30 August 2026.
- Land Titles Assurance Fund decision — J.W. (PDF). Director of Titles, 26 January 2010. Claim dismissed with no award because the claimant could not prove the amount actually advanced. Describes the Fund as one of last resort for most claimants. Accessed 30 August 2026.
- Understanding title insurance. Financial Services Regulatory Authority of Ontario. Consumer guidance on what title insurance covers and excludes, and on owner versus lender policies. No publication date shown on the page. Accessed 30 August 2026.
- Fraudsters are selling homes they don’t own. CBC News, 23 January 2023, updated 24 January 2023. Reports at least 30 GTA homes sold or mortgaged without owners’ knowledge, an industry estimate of roughly $200 million in title fraud claims since late 2019, and that stand-in fraudsters were paid $5,000 to $10,000 per job. Accessed 30 August 2026.
- Toronto homeowner discovers her condo was sold without her knowledge. CBC News, 20 January 2023. Reports a Toronto condominium listed on 11 May, sold on 20 May and transferred on 15 June by an impersonator, with a caution placed on title by the Director of Land Titles on 31 August. Accessed 30 August 2026.
About the author — Jatin Dua, Etobicoke real estate agent
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke. I write these pages the same way I work a file: read the primary source, quote it, date it, and say plainly where the source is silent or where two sources disagree. If a figure on this page has no citation beside it, that is a mistake and I want to hear about it.
I work with buyers, sellers, renters and investors across Etobicoke, Mimico, Humber Bay Shores, New Toronto, Long Branch, Alderwood and Stonegate–Queensway. connect@jatindua.com or 437-987-1925.