FINTRAC Regulations!

Why is my Realtor asking me for Identification? 

On June 23, 2008, the way in which businesses, in this case Real Estate Brokerages, conduct their day to day activities has changed.

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), requires real estate agents and others covered by the legislation to identify clients who conduct financial transactions such as buying and selling real estate. The Financial Transactions and Reporting Analysis Centre of Canada, or FINTRAC, collects and analyzes financial information and intelligence on suspected money laundering and terrorist financing activities. Real Estate Brokerages who must report to FINTRAC are required to ‘know their clients’ and asking for ID is one w ay to do that.

The Act requires us by law to ask you for ID and also requires us to keep records. Under the Act, you are required to provide valid identification such as birth certificate, a driver’s license, or similar type of document. A health card is not to be used for identification in Ontario. The ID must contain a unique identifying number and must be current and valid.

Forms that Realtors in Sault Ste. Marie will most likely be using are known as an Individual Information Record and may contain the CREA (Canadian Real Estate Association) logo. Other information to be provided is your address, date of birth and occupation.

Concerns about privacy have been raised by our association however PCMLTFA supercedes all privacy legislation. We are required to retain this information in our files for a period of not less than 5 years.

Determining the identity of a Corporation and its officers or other entities as well as third parties to a transaction is also covered under the Act.

Since 2002 the real estate industry has been covered under the Act however our obligations were only to report large cash transactions ($10,000 + cash deposits) or to report a suspicious individual or transaction. These new requirements will change the day to day process of buying or selling real estate significantly.

Another requirement of the Act is to “track” all funds. A Receipt of Funds Record is required under the Act in respect of every receipt of funds that a Realtor acting as an agent in respect of the purchase and  sale of real estate receives in the  course of a single transaction.

So when it comes time to purchase that home of your dreams or to sell your current home and you enlist the services of a real estate professional, be prepared to provide your identification. All real estate professionals in Canada are required by the act to do so. It is the law.

For more information or clarification please feel free to email me at suttongroup@shaw.ca or phone (705)253-7100 or toll free at (888)253-7101.