Even if it is arranged long after the initial purchase, it’s important for all property owners to have title insurance, Bob Aaron writes.

An appeal decision of Ontario’s Divisional Court has put an end to a bitter family dispute in which a woman stole the title to her parents’ home, put a mortgage on it, and used the proceeds to pay off the mortgage on her own home.

Nathramdas and Premwattie Chateramdas have lived in their Fawcett Trail house since 2000 and raised their family there. It had been mortgage-free since 2010 and comprised virtually all of their assets. They did not get title insurance when they bought the house.

Then, almost overnight, it was gone. They lost the title to their home — not to a stranger, but to their own daughter.

In November 2022, their daughter, Melissa Sanasie, transferred title into her own name by forging her parents’ signatures and presenting the bogus documents to a real estate lawyer.

Within days, Melissa used the stolen title to obtain a $760,000 mortgage from RiverRock Mortgage Investment Corp. — a lender that promotes a “four-hour turnaround time.”

More than $515,000 of the mortgage proceeds were used to pay down mortgages on the Richmond Hill home of Melissa and her husband, Andrew Sanasie, and to fund another purchase.

Her parents knew nothing about the transactions. It was only in early 2024 — when a City of Toronto property tax bill arrived in their daughter’s name — that they learned that ownership of the home had effectively been hijacked.

What followed was a lawsuit by the parents against everyone involved: Melissa and Andrew, the mortgage lender, and Ziba Heydarian, the lawyer who handled the transaction. The provincial director of land titles was also a party so it could be ordered to correct the fraudulent documents.

At the heart of the case was a key provision of Ontario’s Land Titles Act. The system is built on the principle of indefeasibility — once a document is registered on title it is generally guaranteed. Buyers and lenders rely on that certainty every day.

Since 2006, however, Ontario law says that a “fraudulent instrument” — even if registered — is void. That provision became the battleground in this case.

In Superior Court, Justice Lisa Brownstone had little difficulty finding that the title transfer was fraudulent — especially when Melissa ultimately admitted the forgery after initially submitting false evidence and doctored documents to the court.

The more difficult question was whether the mortgage should survive. After all, the lender had advanced real funds to the registered but fraudulent owner.

The court noted that the lender had the opportunity to detect the fraud and failed to do so. Between two innocent parties, the law placed the loss on the lender rather than the true owners.

Title was restored to the parents and the mortgage was discharged.

The Chateramdas parents sought punitive damages against their daughter.

“This is a rare case in which punitive damages are appropriate,” Justice Brownstone wrote. “Melissa stole her own parents’ equity. … (Her actions) go to the very heart of the justice system …”

Melissa was ordered to pay her parents a staggering $150,000 in punitive damages, along with $90,000 in costs.

Last month the Divisional Court upheld the decision against Melissa, Andrew and RiverRock. Melissa and Andrew were ordered to pay $10,000 in appeal costs, and RiverRock had to pay $13,000.

The rules of Ontario’s Law Society make electronic or in-person verification of client identity mandatory in real estate transactions. The court decisions do not make clear whether that was followed in this case, and it remains a separate matter.

For homeowners who purchased their homes without title insurance, this strange saga emphasizes how important it is for all property owners to have title insurance, even if it is arranged long after the initial purchase.

Also not mentioned in the cases was whether the losses sustained by RiverRock were covered by title insurance.

Sadly, there were no winners in the case.

Column on the trial decision: https://www.aaron.ca/daughters-mortgage-fraud-on-her-parents-house-shines-a-light-on-the-need-for-homeowner-title-insurance/

Trial decision: Chateramdas v. Sanasie, 2025 ONSC 560 (CanLII), <https://canlii.ca/t/k97bl>

Appeal decision: Sanasie v. Chateramdas, 2026 ONSC 1599 (CanLII), <https://canlii.ca/t/kk7sp>