Law Times

Page 4 February 4, 2013 Law Times • NEWS LSUC considers anti-fraud declarations for real estate lawyers BY YAMRI TADDESE Law Times I n another stab at curbing the large number of real estate fraud cases it sees, the Law Society of Upper Canada is working on a set of declarations that will have lawyers confirm they know how to avoid being a victim. The declarations, if passed, will be a part of the annual report for lawyers who act in real estate transactions. Traditional victims aren't the only ones hit hard by mortgage fraud, according to the law society, which notes it devotes "significant resources to complaints and claims arising from real estate transactions, including lawyers engaging in mortgage fraud." According to documents released for the Jan. 24 Convocation, the law society took longer to complete regulatory investigations in 2012 than the previous year. The committee attributed much of the increase to real estate and mortgage complaints. In 2012, the median age of complaints to the law society was 245 days. That represents an 8.6-per-cent increase from 2011. But real estate cases skewed the numbers, the law society reported. LawPRO has also felt the sting. Real estate cases comprised 29 per cent of reported claims from 2000 to 2011, says Dan Pinnington, LawPRO's vice president of claims prevention and stakeholder relations. "Consistently over that period of time, they're one of the largest if not the largest area of claims in our portfolio," he says. Benchers have yet to vote on the motion approving the proposed declarations after Convocation sent it back to committee for further work. noted in his law soci"Despite numerous ety factum that he gave law society communiGraham his Teranet cations, hearing panel diskette and password decisions, and amendfor electronic title regments to the Rules of istrations in April 2008. Professional Conduct, "With hindsight, I some lawyers involved look so foolish," Amisin disciplinary proceedsah-Ocran told Law ings claim that they are Times in 2010. "My failunaware of some or all of ure to cut all ties with their obligations under Claire was the biggest the rules regarding real mistake of my life." estate practice," the moThe proposed dection states. larations are "another A recent case, in fact, dealt with some of 'I expect there will be opposition by some way to bring those issues members of Convocation who do real estate the issues the declara- who feel that the real estate bar is being home," says Bencher Alan Silverstein, a certion would address. On targeted by this,' says Alan Silverstein. tified specialist in real Jan. 16, the law society suspended Mississauga, Ont., lawyer estate law. "Mortgage fraud is a huge issue. Charles Ato Amissah-Ocran for two It's a huge problem with the profession; it's years following a real estate fraud inves- a huge problem with public; and it's a huge problem with the lenders." tigation. If the motion passes, lawyers will have The suspension is retroactive to Dec. 2, 2010, and continues "indefinitely there- to check off six statements that include conafter" until Amissah-Ocran responds to firming that in the past year, they haven't allowed anyone other than themselves to several orders by the law society. One of the accusations levelled against use their electronic title registration disAmissah-Ocran involved a failure "to be on kette. They'll also have to say they have guard against being duped by unscrupulous supervised all non-lawyers who worked persons in connection with 12 transactions." for them and haven't acted for both a borAmissah-Ocran has in turn sued a for- rower and a lender in a real estate transacmer employee, Claire Graham, for loss of tion expect in limited circumstances. But when the motion comes back income on account of fraud, conspiracy, and breach of fiduciary duty. The lawyer to Convocation, it's sure to draw dissent kept Graham on staff performing litigation from some benchers, says Silverstein. "I expect there will be opposition by support even after a law society investigator told him she was a known fraudster. He some members of Convocation who do then assigned Graham's sister and nephew real estate who feel that the real estate bar to work in the real estate portion of his is being targeted by this," he notes. "And I agree — they are being practice. In addition, Amissah-Ocran targeted. But my response very simply is the real estate bar is also being targeted by the fraudsters. We're not seeing the same kind of activity with criminal lawyers or litigation lawyers and family lawyers and we have to step up and deal with this." Not allowing access to Teranet diskettes to staff or giving out the password for them top the list of declarations. And that's for a good reason, says Silverstein, who sits on proceedings authorization committee at the law society. "It's called the Teranet diskette. That's not really what it is; it's the lawyer's electronic signature. And the lawyer is signing the transfer because we have the exclusive right to sign transfers. This is the same as signing a trust cheque and anybody who looks at it differently is wrong. It is you signing that document." While the declarations can be a friendly reminder of the rules, some members of the bar say signing them at the end of the year may be too little too late. "Signing off a declaration is sort of a post-opportunity. It's something you do after the fact, after the year is done, as opposed to learning every day and being reminded," says Karen Yolevski, a partner at Basman Smith LLP. Yolevski says the "glamorous" side of fraud, such as fake certified cheques, gets much of the attention when "under your nose, a trusted clerk or employee is doing something like this. "You hear about it after the fact but you don't hear about a lot of prevention that can go into it," says Yolevski, who adds regular courses under the law society's continuing professional development program for real estate lawyers might be a better option. LT Now Accepting Applications for Classes Starting in September 2013 September 2012 for Part-time, Executive LLM program for corporate counsel and practising lawyers Information Sessions Thursday, February 7, 2011 5:30 7:00 pm Wednesday, December 7th, 12:00 to -2:00pm Thursday, March 7th,2011 8:00 - 9:30 am Friday, December 9, 5:30 to 7:00pm U of T Faculty of Law, Faculty Lounge 78 Queen's Park, Toronto No registration required. Please feel free to drop in anytime during these hours. Taught by U of T Faculty of Law professors, together with top Taught by U of T Faculty of Law professors, together with international faculty from INSEAD Business School, top international faculty from MIT-Sloan School of Management and expert practitioners. NYU School of Law, and Rotman School of Management. For more information and to apply: http://www.law.utoronto.ca/programs/GPLLM.html Supported by the Association of Corporate Counsel (ACC) - Ontario Chapter and in partnership with Carswell, a Thomson Reuters business. GLLM_LT_Jan7_13.indd 1 www.lawtimesnews.com 12-12-21 10:59 AM

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