Friday, September 29, 2006

B.C. Duplicate Certificates of Title

As I wrote in my previous post on real estate fraud here, cases of crooks forging a real estate owner’s signature on a transfer or mortgage document to fraudulently obtain sale or loan proceeds are rare in British Columbia.

But if you are really worried about that happening, and you don’t have a mortgage registered against your real estate, you could apply to the land titles office for a duplicate certificate of indefeasible title of your property. If your duplicate certificate of title is out, you must deposit it to register a mortgage or transfer title. This makes it very difficult for someone to fraudulently register a mortgage or transfer the title to your real estate.

Forty years ago, it used to be common practice to take out the duplicate certificate of title to protect against fraud. This is no longer common practice, but you can do it.

The downside is that you could lose the duplicate certificate of title. If you lose it, you have to apply to the registrar of land titles to issue a provisional certificate. This can be costly, and may take a couple of months. Unfortunately, people usually don’t realize the duplicate certificate is missing until they are required to register a mortgage or close a sale. If a sale is closing the following week, the deal may collapse.

The duplicate certificate of title is sometimes used as security for a loan. A lender may take possession of the duplicate certificate of title instead of requiring a registered mortgage. I see this occasionally, but lenders are probably more protected by a registered mortgage.

If you would like to read the relevant sections of the Land Title Act, RSBC 1996, c. 250, see Part 11, Division 2, Part 12 and Part 13.

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