Richmond man can’t pay property taxes because he doesn’t legally own his house

Gillian Shaw
Sun

Norman Gettel stands in front of his Richmond bungalow that — unknown to him — was sold and mortgaged. He didn’t find out until he made some phone calls to ask why he hadn’t received this year’s annual assessment. Photograph by : Bill Keay, Vancouver Sun

When the annual assessment for Norman Gettel’s home didn’t arrive in the mail this year, he phoned the BC Assessment Authority.

“They said, ‘You don’t own the property any more,’ ” said Gettel, a printer who retired from his job at Pacific Press in the late 1990s, a few years after he had paid off the mortgage on his Richmond bungalow.

“I went to the land titles office. They pulled it up and said, ‘You don’t own the property any more.’

“I said, ‘I hate to differ with you, but I didn’t sell it.’ “

The title told a different story.

According to the property documents, not only had Gettel sold his property, assessed at $600,000-plus last July, but the buyer had also immediately put a $400,000 mortgage from CIBC on it.

The buyer never showed up to claim the property.

The mortgage, at $2,600 a month, is in default, and Gettel can’t even pay his property taxes because, according to legal records, he doesn’t own the place.

So far Gettel, who is in his 70s and suffers from chronic obstructive pulmonary disease, has paid his lawyer $10,000, and the case hasn’t even made it to court, although Gettel’s lawyer has filed a notice of pending litigation.

It’s all part of an elaborate scheme that has surfaced recently in B.C. in which con artists are attempting to sell homes without the owner’s knowledge, leaving the homeowner off the title but with hundreds of thousands in new mortgage debt against the property.

In the latest variation of the scheme in B.C., a would-be seller contacts a notary or lawyer to carry out the sale of a home.

A buyer, who is thought to be in on the deal, applies for a mortgage on the property and if the transfer is successfully carried out, the mortgage funds are paid to the seller. The buyer and seller disappear and so does the money, often leaving the homeowner to discover the ruse only when the bank notices the mortgage payments aren’t being made and comes looking for its money.

While such fraud is not new, title insurance company First Canadian Title said B.C. has seen a jump in suspicious cases this year. And a B.C. Supreme Court decision this month ruled that while a true owner could regain title to a property if it was fraudulently transferred, mortgages taken out on the property — even if fraudulently obtained — still stand.

In that case, a plaintiff asked for restoration of title, which had been fraudulently transferred to an imposter. The plaintiff also sought the removal of two mortgages placed by the fraudster against the property.

The court directed land titles to issue a new title reflecting the plaintiff’s ownership. However, it dismissed the plaintiff’s action seeking cancellation of mortgages.

The latest cases have prompted an alert from the Law Society of B.C. to its members.

“As far as I’m aware there have been two or three attempts in B.C. in the recent past to perpetrate frauds of this nature and our notice was to be proactive in raising the awareness of the profession so lawyers could play a role in stopping the attempted frauds,” said Susan Forbes, director of insurance with the Law Society.

“In the cases we have recently become aware of, the fraud is happening at the level where there is an actual transfer of title; it is not simply a mortgage. A fraudster is posing as an owner and conveying the property to another, who is a partner in the fraud.”

Gettel has been told someone claiming to be him showed up at a Surrey law office to sign the property transfer papers.

The property transfer lists the market value of his home at $607,600.

The next line, “consideration” — the transfer price — reads: “$1.00 AND NATURAL LOVE AND AFFECTION.”

The person listed as the buyer, Oleg Balan, took out a $400,000 mortgage on the property, but that appears to be the last the bank heard of him.

Gettel received a copy of a lawyer’s letter to Balan dated Feb. 1, 2008, in which a lawyer for CIBC Mortgages Inc. demanded payment in full of $403,034.95 plus interest at $53.18 a day plus legal expenses of $375. The letter gave notice that CIBC Mortgages “intends to enforce its security” on Balan’s property.

CIBC spokesman Rob McLeod said the CIBC is in contact with Gettel’s lawyer and no foreclosure proceedings have been commenced or are currently contemplated. He said the RCMP is aware of the file.

Such schemes constitute a lucrative sideline to identity theft and have been carried out in other parts of Canada. A 90-year-old Ontario man ended up in court with a bank demanding he pay the $300,000 mortgage that fraud artists had taken out on his property, which was sold without his knowledge. A court eventually ruled that he didn’t owe the money.

Balan’s name has also surfaced in the sale of a Vancouver home that was recently blocked when real estate lawyer Ron Usher doubted its authenticity. In that case, another man was listed as the buyer, but the mortgage proceeds were to be paid to a company, VP Custom Trading Inc., that lists Balan as a director.

A man phoned Usher recently asking if he would act for his father on the sale of the family home. The father arrived at Usher’s office with all the details of a $665,000 offer on his east Vancouver home, for which he said he had received a $66,500 deposit.

His client gave him a phone number, but Usher checked the address of the property and called the house.

“I’m Ron Usher, the lawyer acting on the sale of your house,” Usher said, recounting the conversation. “He said, ‘I’m not selling, and who are you?’ “

The perpetrators had filed a change of address with the post office to intercept mail linked to the fraudulent dealings.

The would-be buyer in that case also turned up as the buyer of a Burnaby property that land title records show was sold recently for $565,000. The buyer got a $518,670 mortgage on the property.

The BC Land Title and Survey Authority put a caveat on the property title after the notary who witnessed the seller’s signature on the deal notified the authority she has been told by police the person who signed the deal was not the true owner.

Gettel’s case also included instructions to the postal service to have mail redirected to a Burnaby address.

Gettel said he went to Richmond RCMP when he found out about the redirected mail, but said he was told it wasn’t something the police would look into. He said he has since talked to Richmond RCMP about his case.

Sgt. Susan Green, of the B.C. RCMP’s commercial crime section in Surrey, said the RCMP can’t release any information about specific investigations.

Ian Smith, director of land titles for B.C. and registrar in the Land Title and Survey Authority’s New Westminster land title office, said such cases are very rare in B.C., but there had been several similar attempts in 2003 and 2004. This year there have been about five others that appear linked to the same perpetrators.

Smith said B.C. has safeguards in place to protect property owners from title and mortgage fraud.

He said B.C. property owners are protected through an assurance fund that compensates them if they are deprived of their title either because of an error in the administration of the land title system or through identify theft and fraud.

“With respect to the mortgage, if it was proved that it was a fraudulent mortgage as well, the bank would be left holding the bag.”

Usher also said he doesn’t know of any cases where the victims lost money in paying off mortgages that were fraudulently obtained.

“I have never seen anybody in all these cases in Ontario — and certainly I’ve never heard of it here — basically an innocent owner having to pay the mortgage of the fraudster.

“It gets solved in some way. What the lawyers are arguing about here is what is the right process.”

© The Vancouver Sun 2008

Frank O’Brien
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Fiona Anderson
Sun

B.C. drug dealers and other criminals will have a tougher time disposing of their ill-gotten gains as new federal anti-money-laundering legislation cracks down on real estate purchases and currency exchange operations.

The new law, which will be in force Monday, also adds other rules aimed at hindering the disposal of large amounts of cash.

Realtors will have to take more steps to ensure they know who they are dealing with. They will also need to hang on to information identifying their clients for five years.

“We know organized crime buys houses and they buy houses on a regular basis,” said Ken Fraser, executive director of investigations with the Financial Institutions Commission of B.C.

Some purchases are made to carry out more illegal activity, such as marijuana-growing operations and amphetamine labs, Fraser said. Others are aimed at laundering the money to turn proceeds of crime into a legitimate asset.

To date, those purchases have often been made using fake identification, Fraser said.

“It’s not that onerous to assume another identity and purchase property,” he said.

In many cases the person listed on the title doesn’t even know his name has been used, he added.

Under the new rules, realtors have “to ensure the person they are dealing with is the person whose ID is produced,” Fraser said.

Last November, police in B.C. froze $6 million worth of real estate they claim was owned by Yong Long Ye, the alleged mastermind behind a drug syndicate charged with importing thousands of kilograms of cocaine from the United States and supplying local methamphetamine and ecstasy labs with ingredients. At the time of Ye’s arrest, police declared they had “chopped the head off the snake.”

Most of the properties were not in Ye’s name, and police would not say how they had traced the homes back to Ye.

Under the new rules, tracing ownership should be easier, said Peter Lamey, a spokesman for the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the organization that collects reports on suspicious transactions.

Real estate is especially vulnerable to money laundering, Lamey said. And requiring realtors to identify their clients will help deter that.

Currency exchanges and money transfer operations — but not cheque cashing companies — are also targeted in the new legislation. Starting Monday, money-services businesses will have to be registered with FINTRAC and will have to make sure that people depositing cash have a legitimate business to support the deposits, said Kim Marsh, managing director of the Vancouver office of IPSA International, Inc., a company that helps others comply with anti-money laundering legislation.

In the past, a person could deposit cash using fake ID and by saying he had a car wash, Marsh said. Now money-services businesses will have to be satisfied that the story, and the ID, are real.

The point is to prevent people from depositing large amounts of cash from crime, he said. And in B.C. that means money from drug trafficking and growing operations.

“Grow-ops generate huge amounts of cash,” Marsh said. “And [the criminals] have to get that cash into the system. If they can get it into an MSB [money-services business] who can get it into a bank account, they’re halfway there.”

Marsh advises companies to ask for lots of documents. A particularly useful one to request is a credit report “because that’s a hard thing to generate,” he said.

“If you don’t have a credit history that’s a huge red flag.”

People will complain, and some will ignore the law, Marsh said.

“And then we’ll be reading about them in the paper some time down the road.”

The new rules — which have been adopted to bring Canada in line with international standards set by the Financial Action Task Force created by the Group of Seven industrialized countries in the early 1990s — also now require companies to report attempted suspicious transactions in which an individual aborts a transaction that would otherwise have to be reported.

© The Vancouver Sun 2008

Sun

When is a home a bargain at more than ten million dollars? When that home’s seven thousand square feet are set on a private half acre on a hillside overlooking Eagle Harbour. Its two-hundred feet of waterfront include one of the few private docks in West Vancouver.

Inside and out, the home has every feature needed for luxurious living, executed with attention to detail and with the best of quality. The stone and wood exterior and the unique roofline with its turreted balconies lend a touch of old-world grandeur.

The three-level home has every amenity for gracious entertaining. The bar and billiard room has a fan to remove cigar smoke, wine coolers and a refrigerator with an ice maker. Off the Bar and Billiard room is a private balcony with a hot tub with views of the harbour. The living room welcomes guests with a gas-fueled fireplace–there are four fireplaces in the home. At sixteen by twenty-two feet, the dining room is perfect for dinner parties.

Outdoor patios and balconies provide views of lovely Eagle Harbour and of the luxuriant gardens. The gardens are designed for year-round enjoyment. Although the home is only seven years old, the gardens were planted with mature rhododendron, roses, wisteria, cedar and arbutus accented with colorful perennials. An extensive lighting system allows guests and family to enjoy evenings outdoors.

The kitchen is a chef’s delight with its professional-grade Dacor stove and oven, subzero refrigerator with pull-out drawers and tumbled marble work surfaces on countertops and island. It includes space to dine en famille while overlooking the bay. The butler’s pantry has its own sink and a second dishwasher.

The master bedroom suite is the “jewel within the lotus.” Opening from the bedroom are a private sitting area with a fireplace, an exercise room, a walk-in closet, a bath fit for royalty with a pedestal tub and jetted shower. Just off the Bedroom is another private patio to soak up the sunsets from the comfort of the master suite.

Two other bedrooms, a family room and a media room keep the family together. The three-car garage and six additional parking spaces will accommodate family and friends.

A virtual walk-through of this elegant home is online at westvancouverwaterfront.com. It is presented by Jordan Hurdal of Prudential Sussex Realty; he can be reached by phone at 604.786.6131 or via email at [email protected].

Situated in Vancouver’s downtown on the northeast side of Stanley Park, Coal Harbour is 23 acres of award winning community design. Stretching from Canada Place along the Burrard Inlet shore. The stunning design of Coal Harbour with it’s focus on waterfront living and its close proximity to Vancouver’s downtown core has contributed to Coal Harbour being one of the premier neighbourhoods in Vancouver.

With spectacular amenities close by the area offers great views of the Coal Harbour Marina, the North Shore mountains, Stanley Park, Lions Gate Bridge, Canada Place and the ports beyond. A beautifully landscaped walkway connects Coal Harbour to the Stanley Park seawall giving residents easy access to the parks’ running and bike trails.

Evelyn Froese of Royal LePage Westside is currently listing 1901 323 JERVIS Street for $7.5 million. This world-class residence in Vancouver’s premiere waterfront building is featured on page E4 and online at www.coalharbourspecialist.com

Vancouver continues to be a wise real estate investment, according to Greg Carros, Vice President Brokerage at Sotheby’s International Realty Canada.

“The natural boundaries of the mountains and sea provide limited availability of property if one wishes to be part of the city vitality. Lifestyle, personal security, schooling and climate play an important role in the increasing international demand for Vancouver properties. The vibrant western economy also plays an important role to property demand in the Vancouver area. Vancouver’s prices continue to be reasonable when compared to other world class cities such as Sidney, Tokyo, Hong Kong, London and New York.”

The following properties available through Sotheby’s International Realty Canada offer increasingly rare opportunities … Pricing would be two to three times that of other world class cities.

Madeline Milne at Sotheby’s compared basic features, size and location of some current listings on the sothebysrealty.com site with some of Sotheby’s Vancouver listings. She found:

A two-bedroom, two bathroom townhome at 1568 West 8th on Vancouver’s West side (listed by Jamie MacDougall) for $1,399,000.

A comparable town home in Manhattan is priced between $3-6 million dollars.

Currently listed with Sotheby’s International Realty Canada a rarely available waterfront property at 2612 Bellevue, West Vancouver – $10,500,000 (Listed by Grant Connell)

This large (13,400 square feet waterfront lot) is within walking distance to parks, restaurants and shops in one of the highest per capita neighbourhoods of Canada.

A similar positioned lot in Palm Beach, Florida is listed for $17 million

Recently sold at 2640 West 50th Avenue – $4,100,000 (listed by Greg Carros) is a 6150 sq.ft. four bedroom 4 bathroom home on a generous 139 by 144 foot lot, 15 minutes from city centre, 10 minutes from Vancouver international airport.

A comparable property in Santa Barbara California is currently listed at $11,500,000.

ESCALA’S PREMIER RESIDENCE

This residence on Jervis in Coal Harbour comprises the entire front of the building with panoramic northwest views to Stanley Park, the Marina and West Vancouver as well as northeast views to Coal Harbour and North Shore Mountains. This special home boasts more than 3,500 square feet of irreplacable luxury living. Some of the many features include a fabulous open floor plan with new contemporary kitchen, exceptional master bedroom and new master ensuite, media room, limestone flooring, built in flat screen TVs, 4 parking, 24-hour concierge, the finest health club and indoor lap pool.

Within easy walking distance to Robson Street, Denman and the Westend, Coal Harbour offers some of the best in fine dining, shopping and local attractions to its residents.

© The Vancouver Sun 2008

Sun

Few buyers will miss the frenzied days of bidding wars and accelerating prices in this cooling of the BC real estate market. It can bring with it a precious commodity – the time to actually choose your new home.

But one growth area that shows no sign of abating is bargains in the shape of assignments (those condos being ‘sold’ before a development completes). With only a limited number of pre-sale units available, buyers who procrastinated at the pre-sale launch now rely on assignment sales in their development of choice.

According to www.AssignmentsCanada.ca, the independent web site that lists assignments throughout Metro Vancouver, units are often assigned just a few months prior to completion by sellers who bought a number of years ago but need to sell due to a change in their circumstances.

For the canny purchaser, this is the time to jump in as the seller is often willing to negotiate quite substantially rather than complete on the unit and deal with the mortgage. Furthermore, a unit post-completion will be worth more on the market than prior to completion.

The most popular assignments on the web site are without doubt in various downtown cores.

Gastown – its reputation growing as an area combining traditional architecture with contemporary interior aesthetics – represents a shrewd investment choice with low rental vacancies (so it’s easy to command a decent rent if you want to have a tenant) and the City of Vancouver has reportedly offered incentives of zero property tax for up to three years within some heritage buildings. One- and two-bedroom assignments are available in the popular Terminus development on Water Street, and in 33 West Pender from $409,500.

BC’s fastest-growing city, Surrey, benefits from the SFU campus and a SkyTrain that takes just 35 minutes to Vancouver. The towers of Central City have one- and two-bedroom assignments in Infinity II from $228,800 complete with a state-of-the-art fitness studio, spa, garden terraces and big-screen theatre.

Another revitalized area, New Westminster, has assignments in the restored CopperStone development starting from $219,000, and a three-bedroom townhouse in the waterfront community of Q at Westminster Quay priced at $628,450. Close to shopping, restaurants, and transit, many astute investors are finding bargains in this vibrant area.

Further afield, the Zora development in Langley represents excellent value. Well-located for convenient highways, $224,900 buys you a 925-square-foot one-bedroom unit.

Little wonder that Metro Vancouver’s assignment popularity is partly fuelled by non-residents and our own downsizing baby boomers who purchase a condo for themselves – as well as one for their children.

Nicola Way is the Manager of www.AssignmentsCanada.ca, an independent, Vancouver-based web site which lists Realtors’ assignment, pre-sale and resale properties since 2004.

© The Vancouver Sun 2008