A Title is a legal term defining the right of owning something. This term also refers to the document confirming your right of ownership. For most of us, a house is the most valuable piece of property we will ever own. Therefore, the consequences of real estate title fraud can be devastating and protecting your title is very important.

The major difficulty in dealing with title fraud which has already occurred stems from the fact that there may be several innocent parties involved whose interests are in conflict. For example, there may be an innocent owner whose house is fraudulently sold to an innocent buyer who didn’t know that he was buying it not from the true owner. In a case like this the court will have to decide either in favor of the owner or in favor of the buyer. Whatever the decision is made, one innocent party will suffer. The loss to the victim may be catastrophic.

There are two major types of real estate title fraud. The first type occurs when a house is sold without the true owner knowing about it. The second type does not involve the transfer of the title, but there is a mortgage loan taken against a house without the knowledge of the true owner. Depending on which role you play in a transaction, there are different ways to protect yourself against fraud.

When you are buying a house, you need to make sure that you are buying it from a real owner and that there is no lien against the property. This can be done through a title search. If you get your lawyer to do the search, you are protected by the lawyer’s Errors and Omissions insurance, but that insurance doesn’t protect you from any fraud that happens after the transaction is complete. From this point on, you are the owner and there are different steps you need to make to protect your title. One way to do it is by being extra careful with your personal information. Real estate title fraud is just one of the types of identity fraud and you simply need to do whatever you do to prevent identity theft. When you live in your house, it will be very difficult to sell it without you knowing about it. But that can happen when you rent your house to somebody or when you go on vacation. Also, by living in your house you can’t protect yourself against a fraudulent mortgage loan taken against your home if somebody steals your identity. If that happens, it may be very difficult or even impossible for you to restore your title or compensate your losses.

In addition to simple common sense, exercising caution and using professional help in transaction involving real estate, a good way to protect yourself is to purchase title insurance. The cost is relatively inexpensive compared to the possible loss from which you may never recover if you become a victim of real estate title fraud.

Nikolay Sisan is a Certified Financial Planner and freelance writer in Vancouver.