Mineral Rights and Real Estate

Frontenac County in Southeastern Ontario is a rocky and rough terrain an hour's drive away from Kingston and Ottawa, yet wild and undisturbed. The beauty of the land is what brought Frank and Gloria Morrison to this area. They thought they had found a little piece of paradise where they could retire.

But two years ago, their dreams suddenly appeared in peril. Working in the woods, Frank noticed a small silver tag on one of his trees. He quickly realized the tag belonged to a prospector.

Unannounced and uninvited, a prospector had staked a mining claim to the Morrisons' property. From that moment the prospector could show up anytime he pleased and have full access to the land he had staked.

"It shocked me," Frank Morrison told W-FIVE. "But once you go into the background of mining, staking and prospecting, you quickly realize it's their right by law to be able to do that."

While the Morrisons had invested their life savings to save the environmentally-sensitive land, all the prospector had paid was $25 for a permit that could potentially destroy it.

The Morrisons' story is not unique, with approximately two per cent of the property owners in Southeastern Ontario in the same position. A small percentage, but still thousands of people, who own the surface rights to the land but don't own what's below the surface: the minerals.

While a mining claim doesn't look like much -- the stake is little more than a few plastic ribbons, tree stumps and a claim tag to mark the territory; it is the potential for damage that concerns the Morrisons.

"In order for them to drill they will remove the topsoil until it's absolutely bare rock for the drill to get into the rock and drill down," said Frank Morrison. In most cases they won't find anything, because according to the Ministry's own statistics, only one in 10,000 exploration projects actually becomes a mine.

In search of a stake

George White is the prospector who staked the Morrisons' property. Prospecting in the region between Ottawa and Kingston for decades, his company, Frontenac Ventures Inc., has accumulated the rights to over 12,000 hectares of private and Crown land and he believes he's found a significant amount of uranium in the area.

If White can find investors, there could potentially be a giant uranium mine right on the Morrison's doorstep. White argues correctly that what he is doing is perfectly legal because he has followed the criteria as set out by the Mining Act of Ontario.

Local landholders are not the only ones who feel powerless against mining interests. Frontenac County Mayor Janet Gutowski said that while the provincial government orders local municipalities to raise environmental standards to protect wildlife and water quality, this is "a complete contrast to the Mining Act which allows such invasive exploration."

Elva Price is another who knows what the threat of a prospector's stake feels like. Raising beef cattle, she and her husband have been farming in nearby Lanark County for more than half a century. When a mining company staked her farm, she thought the Mining Commissioner would help keep them away. Instead, the company was given permission to not only stake the property but also gave them permission to buy their property at 200 percent of the farmland value and gave them a month to get off their land.

After taking the case to the Ontario Ombusdman, that decision was eventually overturned and the prospectors were ordered off the land. It cost the Prices thousands of dollars in legal fees, even though they insist their original deed showed they owned the mineral rights to their property -- but lost them due to some obscure Ontario mining laws.

The province levies a mineral tax on rural properties, which ensures the landowners keep the mineral rights. But the Prices were unaware of the tax and failed to pay and so their mineral rights reverted to the province, opening up their property to prospectors. The tax is still levied by the Ontario Ministry of Northern Development and Mining.

Charles Ficner, a retired federal civil servant, has spent 18 years studying the Ontario Mining Act. He charges that the reason the province wants to reclaim mineral rights is so that they can help mining companies obtain access to privately held land.

"If a mining company finds minerals under private land they have to pay the owner for the right to get at them," Ficner told W-FIVE. "But if they find minerals under publicly-owned land they pay nothing."

The objective of the ministry is to encourage mining, and Ficner believes this is one way they accomplish that.

Facing criticism from rural landowners like the Morrisons and the Prices, the Ontario government is promising to change the Mining Act to protect private property rights.

"We do believe that people deserve to know their property is secure," Michael Gravelle, Ontario's Minister of Northern Development and Mines, told W-FIVE. "And on that basis I can say that we are going to resolve the situation in a satisfactory fashion."

Source: W-Five

MORTGAGE FRAUD IS A HOT TOPIC - BE ALERT THERE ARE PRECAUTIONS YOU CAN TAKE

In view of the large mortgage fraud that was perpetrated by an individual just north of Toronto and which has just come to light, I thought that this was the right time to blog this useful piece of information.

Bess
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Few people are aware of the possibility of fraud against their home. But people with substantial equity in their homes or who spend more time out of their home become easy prey for sophisticated fraudsters who have the means to perpetrate this kind of crime.

Susan Lawrence is a Toronto victim of real estate fraud. Her home was mortgaged for almost $300,000 by fraudsters who forged her signature and walked away with the money early in 2005. She says, “Until I was defrauded, I was not aware that if I had title insurance, I would have been protected.”

The Ontario government plans to introduce legislation this fall to enhance existing protection from real estate fraud. If passed, the proposed legislation would ensure that ownership of a property couldn’t be lost as a result of the registration of a falsified mortgage, fraudulent sale or a counterfeit power of attorney. Instead, innocent homeowners will have their titles restored to them and the fraudulent document will be nullified, the government says.

Minister of Government Services Gerry Phillips said, “While individual cases are of concern to me and are upsetting, I can reassure homeowners that real estate fraud is limited in comparison to the more than two million real estate transactions that occur each year in this province. However, we will continue to build on today’s proposals because even one case of fraud is too many.”
Title insurance is one inexpensive way that homeowners can protect themselves from mortgage fraud.

Fraud protection

For many buyers, the fraud coverage provided by title insurance is particularly reassuring. Title insurance can protect homeowners if they are the victim of fraud, and may also pay the costs involved in defending their ownership in the property and restoring their title to the home.

Title insurance provides protection against title-related problems; it is not home warranty insurance, and will not protect homebuyers if the fridge breaks down or the furnace gets old. As with any insurance purchase, the homebuyer should consult the policy for full details of the actual terms and conditions and seek advice from a real estate lawyer. A real estate lawyer can help a buyer or a homeowner sort out the various protections offered by different title insurance companies in order to get an idea of which risks are covered and which are excluded.

One company that sells title insurance, commissioned a survey that found nearly half of homeowners over the age of 45 said they do not have title insurance or are unaware if they do. The survey also found that 63 per cent of Canadian homeowners without title protection had “absolutely no understanding of title insurance – a number that rose to 66 per cent for those over the age of 60,” says the company.

Court of Appeal decision protects the homeowner-victim

In February, the Ontario Court of Appeal reversed a decision that held defrauded home owners on the hook for a fraudulent sale. In a unanimous 5-0 ruling, the court’s decision said that banks and lending institutions had “to be vigilant when making mortgages, and places the burden of fraud on the party that has the opportunity to avoid it – rather than on the innocent homeowner who played no role in the perpetration of the fraud.”

In this Court of Appeal decision, Lawrence v. Maple Trust Company, the homeowner won, was able to keep her home, and was not required to repay the illegally-obtained mortgage.

The Court of Appeal decision is a reversal of a lower court decision made in the fall of 2005 which held that fraudulent mortgages are binding once registered.