When Melissa Walsh's great uncle moved into a long-term care home in late 2021 just before his 95th birthday, her family decided to rent out the east end Toronto home he's owned since the 1970s. The idea was to help him pay his expenses.
The family had turned to a local Royal LePage brokerage where two real estate agents helped them find and screen tenants to rent the house on Maclean Avenue in The Beach neighbourhood starting in December 2021.
That began a chain of events that Walsh describes as "the ultimate real estate nightmare."
The family later learned the tenants chosen had used fake identity documents and bogus references on their lease application, and Walsh said police eventually referred to them as "ghosts" after trying to locate them.
What's more, just weeks after the lease agreement was signed, the family found out that someone posing as the 95-year-old homeowner had hired two different real estate agents from another Royal LePage brokerage to list the house for sale without the family's knowledge or permission.
The home was staged with furniture, advertised online for $1.29 million and quickly generated a flurry of offers, Walsh said. One came in at $1.9 million.
"I can't even form words to describe that moment at that time because it's just so unbelievably out there," Walsh said. "You're going, 'What happened? What's going on?'"
Walsh's family was able to put an end to the attempted scam before the house could be fraudulently sold, but the case bears a striking resemblance to an investigation the Toronto Police Service (TPS) asked for the public's help with last week, in which another family wasn't so lucky.
In that case, police say two homeowners left Canada for work in January 2022 — the same month Walsh's great uncle's home was listed for sale — only to learn months later that their property had been sold without their knowledge by people using fake identification.
In an email viewed by CBC News, a TPS detective in the force's financial crimes unit who is investigating told Walsh the two cases are "related." Walsh said the detective subsequently told her the fake name used by the male tenant who rented her great uncle's home was also used in the TPS case.
CBC News is not identifying the names of the fraudulent tenants as doing so may identify the victims of identity theft.
"At first, we thought it was mostly just a handful of real estate agents that weren't doing their job, but then after hearing about this other house, I think there's definitely a deeper problem with the real estate industry," Walsh said.
Over the past year, CBC News has reported on numerous allegations of fake identifications and other documents being used to rent homes and take out fraudulent mortgages, but these attempted home thefts appear to take real estate fraud to an alarming new level.
Walsh said the two cases raise questions about whether real estate agents in the multi-billion dollar industry are doing enough to verify the identities of potential tenants, homesellers and homebuyers.
In her family's case, she said documentation provided by the tenants and the person impersonating her great uncle contained several red flags that the agents should have picked up on, beginning with the fact that the person impersonating Walsh's great uncle spelled his name wrong twice when signing documents.
When screening the two potential tenants, the agents collected photocopies of their driver's licences, contact information for their employers and personal references, and credit history checks.
The companies listed as employers had very little online presence, including no website.
When CBC called the phone numbers, those given for the employers were out of service, as was one of the personal references. The second personal reference appeared to be a wrong number.
CBC News also ran the three driver's licence numbers through the Ontario government's free driver's licence check tool.
The two licences provided by the tenants on their lease application came up as "not found," meaning they were not recognized Ontario driver's licence numbers. The licence number provided by the person impersonating the 95-year-old homeowner on his listing application came back as "not valid," meaning it had been suspended, cancelled or expired.
It's unclear whether any of the agents involved ever called the references and, if they did, what response they received. It's also unclear whether they checked the validity of the driver's licences, or what the status of the licences would have been in November 2021 or January 2022, respectively.
'A coordinated scheme'
In a statement, a spokesperson for Royal LePage said it doesn't govern day-to-day operations at its brokerages, which are all independently owned and operated. But licensed sales representatives are obligated to abide by industry regulations and to perform due diligence as laid out by the regulating body.
"This very unfortunate incident was clearly a coordinated scheme aiming to take advantage of real estate professionals and an innocent family," communications director Anne-Elise Cugliari Allegritti wrote.
"The Royal LePage agents in question followed all due protocol and had no reason to suspect that any suspicious activity had taken place."
According to the Real Estate Council of Ontario (RECO), the industry regulator, both provincial and federal legislation requires real estate professionals to confirm the identity of all individuals, including buyers and sellers, involved in a real estate transaction.
"The most common [method] would be to rely on government-issued photo identification to assure themselves of the identity of the person they are dealing with," RECO said in an email.
"Also, the local public land registry information about the owners of every property within the municipality, which ought to be confirmed before engaging to sell a property, is readily available to agents."
Federal guidance documents that RECO identified as the industry standard tell agents they can determine whether a person's government-issued ID is "authentic, valid and current" by viewing it in the presence of the person being identified and analyzing its characteristics and security features.
Identification can also be verified without the person physically present by using a scanned version paired with a live video chat or photo of the person being identified, according to the guidance.
ID rules too lax, realtor says
Varun Sriskanda, a realtor, property manager and housing policy advocate who was not involved in either fraudulent incident, said these requirements are too lax to prevent identity theft, mortgage fraud and title fraud.
"We only collect one piece of government-issued ID. That means that the fraudster only needs to forge one piece of government-issued ID," said Sriskanda.
"All you need is to convince your realtor that you are that person standing in front of them and that that identity document is yours. After that, that house goes on MLS."
Sriskanda said provincial rules should change to require agents to check at least two different pieces of ID to make it more difficult for fraudsters to dupe agents — something he said he already does as a matter of practice.
Morris Cooper, a civil litigation lawyer in Toronto who successfully argued a landmark case of mortgage fraud in 2006, said the onus shouldn't be on agents.
"They're salespeople. They get paid if the sale closes, and they don't get paid if it doesn't," Morris said. "The gatekeepers are really the real estate lawyers who handle the transaction of the purchase and sale, and they are obliged to satisfy themselves as to the identity of their clients in all cases."
Walsh said her family's experience has shaken her faith in the real estate industry.
"At the end of the day, you just kind of assume that these people are doing their jobs, that there are those regulatory bodies that have these rules to follow to make sure that nobody is getting their properties sold from beneath them, but clearly those systems aren't in place," she said.
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