Remaxultimate’s Blog

As of June 23 2008 there will be more paperwork for our clients and much more responsibility form Realtors and Brokerages.  Also known as the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC is the short form and it’s become the talk of our industry.  

The main purpose and FINTRAC’s mandate is to detect and deter money-laundering and terrorist activity financing while enhancing public awareness.  Since being established in 2001 there have been over 17 million reports received affecting billions of dollars.  This is real, it’s huge and it affects all deposit taking institutions, insurance companies, securities dealers, agents of the Crown that sell money orders, solicitors, accountants, accounting firms and of course Real Estate Brokerages. 

It was explained to us that Real Estate is attractive because it can provide a place to conduct illegal operations like grow operations and meth labs etc. It also provides an opportunity to mortgage property through private investing and can definitely disguise ownership of assets.

I would like to give a simple example of how money laundering can happen in Real Estate.  Buyer calls Realtor to view the property.  Doesn’t provide much info, is very private and submits offer on a property with a $50,000 deposit that is wired into the Brokerage trust account. The offer is conditional on financing and inspection.  Several days later the buyer informs the Realtor that the financing or inspection falls through and requests the deposit money returned.  The Brokerage proceeds to write a cheque from the Trust account to the Buyer.  The financial institution doesn’t question this deposit because it was received from a legitimate “trust” account of a Real Estate Brokerage.  The money has now become legitimate.

As of June 23, 2008 we will be required to request ID from our clients when representing a sale and or purchase of a property. These items may include a valid drivers license, passport and or a birth certificate. The only ID that cannot be used is an OHIP card. It is the obligation of the Realtor to confirm that the client is the owner of the property they are selling and the buyer identity is correct when purchasing the property.  It is also the responsibility of the Realtor to notify and report any suspicious transactions to FINTRAC and failing to do so will result in substantial fines and legal proceedings.

We are now even more accountable and turning a blind eye to suspicious behaviour will not be acceptable.  Funny….there was a time where we can purchase real estate without photo ID but need photo ID to rent a video. Now photo ID is must for everything.

Tim Syrianos
RE/MAX Ultimate Realty Inc., Brokerage

Filed under: Home Buyer tips, Home Seller tips, Toronto Market Watch Tagged: | Home Buyer tips, Home Seller tips, Toronto Market Watch, Toronto Real Estate Update