Investor, government battle over 'improper' land transfers

Manitoba's land registry office is trying to stop homeowners from unwittingly selling their houses to an investor who seeks out people in financial trouble and offers them last-resort financing.

Richard Boon searches public documents at the land registry office for indications that someone is behind in their mortgage payments and facing foreclosure. He then shows up at the address or makes a phone call, offering his services to help people save their homes.

Several families who signed contracts with Boon told the CBC they thought they were getting a loan – but later learned they had handed over their homes.

Gerhard and Lydia Storm purchased their home in Winnipeg in 1998. Two years ago, Gerhard, a housepainter, had trouble finding steady work and fell behind on his mortgage payments.

Gerhard told CBC News the debt was around $4,000 when the bank started the process to foreclose on the property. Then the Storms received a phone call from a stranger who said he could help.

Boon phoned several times before the Storms agreed to meet him. Gerhard and Lydia say he came by the house with paperwork and a plan to pay off their debts.

The Storms say the agreement – as they understood it – was that Boon would save the home from foreclosure by paying the $4,000 in arrears. The family would make mortgage payments directly to Boon, plus a monthly fee of $100, a final lump sum of $1,200 and 10 per cent interest.

"He briefly explained, not really explained, but like, 'Sign this and sign that,' and we ended up going to an insurance company and a commissioner of oaths witnessed the signatures on some of the documents," Gerhard said.

"I didn't want to lose the house to the bank, which I found out afterwards I more than likely wouldn't have if I had talked to their lawyer," Gerhard added. "I didn't know about anything like that."

Home ownership signed over to Boon

A few months later, however, the Storms say the bank called to say the mortgage payments weren't being made. Then Lydia found an eviction notice in the mail.

The Storms contacted a lawyer. They were shocked to learn they no longer owned their home – Richard Boon did. Another numbered company, controlled by Boon, had registered a second mortgage worth $140,000 on the home. Boon was also in the process of selling the house to someone else.

"I was quite surprised when I looked at what they had signed and what they did and what they thought, because it was night and day," said the Storms' lawyer, Clay Stewart.

"They thought they were getting out of a financial jam by paying someone to cover their mortgage, and what they did was sign their home away."

Among the papers Gerhard Storm had signed in March 2004 was an agreement of purchase and sale, a residential tenancy form and an agreement that the Storms could buy back their home on a single day the following year.

Stewart did manage to stop Boon from selling the house to someone else – but he says the Storms are still in trouble.

The family is living in and making mortgage payments on a house they don't own, while Stewart fights to get the title transferred back to the family. The bank is still in a position to foreclose, because Boon hasn't made the required payments. If the house is sold, Boon, as the legal owner, will make the profit, and the Storms will get nothing – and they'll have nowhere to live.

"Why should they turn around and lose their house over a debt which I think was around $5,700?" said Stewart. "They're going to lose $30,000-plus, because of a $5,700 debt? That's absurd."

"I had no idea that I was signing the house over," said Gerhard Storm. "It would have been ludicrous to do that for that amount of money."

Land titles office steps in

Over the past six years, Richard Boon has talked 69 people into transferring ownership of their homes over to him in exchange for help paying their mortgages.

The number would be over 100 if Barry Effler hadn't stepped in.

Effler, Manitoba's deputy registrar general, estimates more than 40 people have come into his office over the years with stories about Boon. Many complained that they hadn't intended to sell their homes, but had signed papers indicating they had, Effler said.

"I'm not aware of anyone in Canada who does business exactly the way he does," Effler told CBC News. "There are a number of lenders who do business with people who are in financial difficulty. [But] those companies, as far as I'm aware, all take mortgages and mortgage security at one rate or another, they balance their risk of loss by charging higher interest rates."

The land titles office, under Effler's direction, reviewed Boon's transactions, the allegations against him and his history at the courts.

The office determined that many of Boon's clients didn't understand what they were doing, so Effler simply stopped processing Boon's land transfers, preventing him from taking ownership.

"When we see a document that … shows that there's been no money paid for the property over and above taking on the liabilities that the property already had … we take a look at and we examine them and we check to see if the parties know what they're doing," he said.

"The district registrar is entitled to file a district registrar's caveat in a circumstance where we believe there's a transaction that's either improper or fraudulent. These transactions are alleged to have been improper," he added.

Since last August, Effler says he's stopped more than 30 of Boon's transactions.

Boon fights land titles office

If it wasn't for Effler, Jeffrey Lee believes he would have lost his home by now. Lee met Boon when he was in financial difficulties in November 2004. Lee says Boon offered to make back payments on his mortgage, in return for future mortgage payments made directly to Boon, plus a monthly fee.

Without reading all the paperwork, Lee signed up.

"He seemed like a nice guy, down to earth, comes in telling you he can help you., He knows when to hit the buttons, and he did it," Lee told CBC.

"I guess that's what really gets to you, because he seems like he wants to help you. At that time, physically, mentally, I was just totally out of it, so to see him was a godsend."

Even though Lee signed his house over to Boon, Effler and officials at the land titles office refused to process the paperwork.

Lee is grateful. "It felt like somebody's trying to help you," he said. "I can't say enough about them, not enough words. I really appreciate that."

Boon hasn't given up on acquiring ownership of Lee's home – or any of the other properties now being held up at the land titles office. He has asked a judge to review the deputy district registrar's actions.

Boon refused to be interviewed by CBC News.

However, in court affidavits, he says his companies provide "last resort" financing, which is inherently risky. He acknowledges some clients have alleged that they've been dealt with improperly, but says that he understands this to be "common behaviour for people in situations of extreme financial distress."

He adds the employees at the land titles office haven't proven the allegations that what he's doing is improper.

If Boon wins his appeal in court, the land titles office would be forced to process the 30 or so transactions currently being held up.

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