Foreign buyer ban & title fraud

PAUL: Countries like Switzerland, Australia, and Mexico all have some version of a foreign buyers ban that limits who can buy what type of property in their country. Much has been made of a Canadian foreign buyers ban that just came into place in January of this year. Tony, what effect, if any, does that foreign buyers ban have here on the Sunshine Coast?

TONY: Most likely, I'd say zero impact. The only impact it could have would probably be to drive some foreign buyers here and maybe skew our prices a little bit, just with that additional investment on the Sunshine Coast.

PAUL: So how does a foreign buyers ban drive foreign buyers to the Sunshine Coast?

TONY: Well, the foreign buyers ban bans foreign buyers from buying in certain parts of Canada. Geographically, the majority of Canada is actually exempt from the ban. The Sunshine Coast is one area, based on our population, that's exempt.

TONY: If someone's looking to get their money out of a country and park it in real estate, as a lot of people have been doing in Canada, specifically in Vancouver and Toronto, now those people can't do that in those areas. And so they're looking for areas that are exempt, and the Sunshine Coast is the area closest to Vancouver with an exemption. One would assume that if foreign buyers want to park money in BC but can't buy in Vancouver, the Sunshine Coast would be a pretty good second choice.

TONY: And the cat's out of the bag about the Sunshine Coast. A lot of people know about our proximity to Vancouver and our amenities and what a great lifestyle you can live here. I wouldn't be surprised if some foreign buyers find that attractive. But we haven't really seen any of that demand to this point, and we have less than 2% foreign buyers at the moment on the Sunshine Coast. Our exemption probably won't have a huge impact.

PAUL: I feel like this is something that's not general knowledge. I was under the impression that a foreign buyers ban meant foreign buyers were banned, period. I wonder how many would-be foreign buyers and even Realtors aren't aware that there are holes in Canada's foreign buyers ban.

TONY: Even when we started researching the foreign buyer ban, it took quite a bit of time to get a general consensus that we are exempt based on municipal census areas. So yeah, absolutely, I'd say that quite a few people aren't aware that there are exemptions in general and that the Sunshine  Coast is exempt specifically. I know there are Realtors on the Coast that I've spoken to which weren't aware of the exemption.

PAUL: Last month there was a rash of stories about a small number of Torontonians that had their houses sold out from under them. Tony, what exactly happened there and is there something that Sunshine Coasters need to be worried about?

TONY: First of all, I'd say it's extremely unlikely that anyone would have to worry about it. BC has one of the best land title systems in the world, and that does a lot to limit fraud. For someone to be able to do this, there's a myriad of things that have to line up. First and foremost, you have to steal the person's identity. A lawyer and a Realtor would both need to miss a fake ID or not do FINTRAC correctly or something like that. You'd have to have two people make mistakes and that's unlikely. 

TONY: But then they'd have to find a target property. The owners are away, the neighbors aren't going to know, and the title has to be clean because if there's any charges on title, that complicates it as well. So I mean, for them to find properties like this, it'd probably be like getting a needle in a haystack, and then they have to do all of the identity fraud and everything else and line everything else up and get a buyer and make sure that the people aren't going to be home. So I'd say it's very, very unlikely that anyone has to worry about it. But there are some stuff I guess, that you can do to try to limit.

PAUL: So if somebody was really worried about this happening, what would be your advice to them? How could they possibly make their home less interesting to a criminal?

TONY: Having a charge on title helps. If you're mortgage-free, you could talk to a mortgage broker about getting a HELOC or a line of credit on your house that you don't have to activate or use. But if a potential title thief sees that charge on title, it would probably make them move on.

TONY: If you're going to go out of town, talk to your neighbors or your family or whomever is going to keep an eye on your property and say, "If a for sale sign gets put in the yard, and some people that don't look like me are pretending to be me, call the police." Having people look after your investment while you're away, or maybe even a property manager, might be a way to go.

TONY: And then thirdly would be to get a actual paper copy of your title. So as far as I understand, you could go to a lawyer and look for what I believe is called an indefeasible copy or state of title. If you were to do that, that becomes the actual title that needs to be presented to sell your home. You should keep it in a lockbox or a safe or a safety deposit box. Typically, keep it away from your house so if your house burns down, you're not going to have trouble later proving ownership or selling it in the future, because that can happen. If you go that route and you lose that physical title, then it can be a hassle to sell your house later on.

PAUL: But that's something that probably any good real estate lawyer could help a homeowner with, if they went there and talked to them about it.

TONY: Absolutely. Yeah. Yeah. So I mean, what I'd suggest is that if you do have concerns about this, you probably do want to go to a lawyer that does conveyance and understands title transfer and that kind of thing. There's several good ones locally on the Sunshine Coast here that could help with that. But I do believe it's such a rare occurrence and so many things would have to line up incorrectly and someone would have to steal the identity of the owner and that kind of stuff, that it's extremely unlikely that that's something they need to worry about. But it is interesting when it makes the news because it's like, "How does that even happen?"

PAUL: Tony, what listings do you have on the market for March of this year?

TONY: Well, Paul, what don't I have this week? There's lots of listings there. I'm the same as the market. Lots of people bringing their stuff online, and I think it's a smart move to do because you don't want to wait until spring or summer when everyone else is on there, and we've probably had another interest rate hike.

TONY: That one has been price adjusted to $1,479,000. Waterfront, beautiful, great view. It's got its own little dock type structure for a deck down on water level. You couldn't get that again. So that one I'm sure will sell this month. It's a great deal. 

TONY: We have the little two bed, one bath unit on North Road. That one I believe should have a price adjustment by the time this goes out. And if that's still available, that's a great deal with a nicely renovated kitchen and a private little yard. Good entry level, no age restrictions on that one. So it could be great for someone downsizing or for someone looking for their first home kind of thing.

TONY: Then we have some fantastic stuff further out, Sechelt, Madeira Park, some really nice big view homes out that way. And then there are all the businesses that we have listed. 

TONY:  And then there are all the businesses that we have listed. Sluggers Gym is still available, which is my pick as far as the commercial goes. And then lots more coming on. 

TONY: I think if you're buying, now is the time to get out and have a look because there's a lot of good deals, a lot of motivated sellers. And as long as you're going to hold the property for a year or two, then more than likely the market will bottom out by the time you look to sell and you'll have built some equity as opposed to paying rent for someone else.