Rachel in Legal, HomeBuying
A recent article highlights one of the most valuable and often glossed over part of your real estate transaction - relationships. Reported in the Globe and Mail, a sad story of how investors were allegedly duped into signing documents that granted ownership in some condos - but they were really purchasing parking spots or mall kiosks.
How does something like this happen – and how can you protect yourself?
I believe that this really comes down to relationships. In order to complete a scam like the one referenced in the article, many players have to be involved. A real estate agent, a bank employee and a real estate lawyer are all players. All of those people were working together to make the scam work – who did the investors have on their side?
Although I am not privy to the details of how this transpired, I can make an educated guess that none of our investors had independent legal advice or an independent buyer's agent. I can make that statement because any professional in the field who had looked closely at the transfer documents would have picked out in an instant that what the purchaser thought they were buying was not what was listed. The problem was that the investors did not appear to have anyone looking out for their interests. Now that charges have been laid, it will be interesting to see how this unfolds for all the involved parties.
In a real estate transaction, whether you are buying a home for yourself or your family or if you are investing to build your portfolio, make sure that you have taken the necessary steps to protect yourself. If your own agent and lawyer are not going to be working on the transaction for you, this may mean that you do not have anyone working exclusively for your interests. You may want to get independent legal advice, especially if the deal seems too good to be true.
Rachel Loizos is an associate lawyer at Sotos LLP in Toronto. She practices in the area of real estate law.
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