Dream Homes, or Deception. Six Red Flags Every Buyer Should Watch For

Fraud in the GTA is becoming more advanced and widespread, especially in the real estate sector. We’ve heard of fraudsters stealing home titles, remortgaging properties, and fleeing with their profits. There are also cases where scammers pose as landlords, collecting rental deposits from many unsuspecting tenants before disappearing. Recently, I came across one involving false pre-construction home sales.

Moiz Kunwar, a 28-year-old man, allegedly impersonated a real estate agent by offering fake homes, false financing options, and misleading promises while pretending to be a trusted developer. He reportedly operated under a company name that closely resembles a well-known builder, Paradise Development Homes Limited. Notice how similar it sounds to the legitimate Paradise Developments Inc.? That was intentional.

Police are currently investigating over forty cases involving alleged fake pre-construction sales, in which Kunwar collected more than half a million dollars in illegal deposits from unsuspecting buyers. Kunwar advertised the properties at low prices and offered very low mortgage rates. It is suspected that Kunwar would take prospective buyers to the development sites and show them specific properties, which were later completed and sold to legitimate buyers. Kunwar’s buyers only realized they had been scammed when their original closing date passed, and they did not own the property. One buyer paid a $170,000 deposit, expecting to close on a five-bedroom home by January 1^st, 2025. According to victims, Kunwar provided all the paperwork, including purchase and sale agreements, and introduced them to a fake financial firm, Empire Financing, where he was listed as the president.

As the number of victims exceeds 40, this case serves as a warning that not all real estate deals are as they appear, especially in a market where desperation meets deception. Many families have saved for years and then believed they had found a great deal, complete with exclusive VIP access and early pricing. They signed the paperwork, handed over the deposit, and then it disappeared. How can you protect yourself? Here are six red flags every buyer should watch for:

• The company name might look correct, but it isn’t. Always verify the developer’s name with official records. A single word, letter, or number can differentiate a legitimate home from a scam. The developer will also have a sales office that you can visit.
• The agent is not registered. In Ontario, all real estate professionals must be licensed with RECO — the Real Estate Council of Ontario. Verify their registration at reco.on.ca.
• You’re being asked to send money directly to an individual, or a numbered company. That’s a major red flag. Deposits should always be made into a brokerage, or builder’s trust account. If you have the account number, you can visit the bank to verify if it is a trust account.
• There’s pressure to sign immediately, leaving no time for a lawyer to review the agreement. Every buyer deserves adequate time to consider and verify.
• It sounds too good to be true: VIP pricing, guaranteed approvals, no competition. Be cautious of any deal that skips due diligence. Remember, the bigger the bait, the bigger the hook.
• The paperwork is minimal; there are no floor plans, no Tarion warranty, no builder license details. Legitimate builders will provide all of this upfront.

Scams like these are becoming more sophisticated. But with some knowledge, buyers in Canada can stay protected.

So, here’s what you can do to protect yourself:

• Confirm the builder’s registration with Tarion and the Ontario Home Builders’ Directory
• Verify credentials of agents, brokers, and lawyers
• Never hand deposits directly to individuals.
• Consult your lawyer for review.
• And most importantly, take your time. Ask questions—Google the company. Look for complaints or lawsuits.

Protecting your investment starts well before making an offer. Today, many buyers face uncertainty, legal costs, and emotional stress, but you don’t have to be among them.

In real estate, doing your homework isn’t optional, it’s essential. Stay sharp, stay safe, and remember, the best deal is the genuine one.