Real estate associates now must verify id of buyers and sellers and track deposits

    CALGARY, June 25 /CNW/ - New federal laws and regulations dealing with
money laundering and anti-terrorist financing that went into effect on   June
23, 2008 will require real estate associates and brokers to collect and verify
more personal information from buyers and sellers. Real estate associates must
also now track the source of funds received during the course of a real estate
transaction, such as the deposit.
    These new regulations are part of federal legislation (Bill C-25) passed
in 2007 that requires a number of industries, including real estate, to do
more to help stop money laundering and terrorist financing. The regulations
are enforced by the federal agency known as the Financial Transactions and
Reports Analysis Centre of Canada, or FINTRAC.
    "Real estate associates have had legal obligations under the federal
government's push to combat criminal activity and terrorism since 2001, when
Canada's first laws to combat money laundering and terrorist financing were
introduced," says the President of the Canadian Real Estate Association,
Calvin Lindberg.
    "In the first phase of compliance, real estate associates were required
to report only suspicious transactions or transactions involving more than
$10,000 in cash" the CREA President explains. "Now, verified personal
information records must be kept of the buyer and seller for each and every
real estate transaction in Canada. That personal information includes details
such as occupation."
    Real estate associates are now required to ask for proof of the identity
of all buyers or sellers involved in a Canadian real estate transaction. If
the client is a corporation, that information must include corporate
documentation, and the names of the corporation directors. Real estate
associates must also ascertain whether a third party is involved in the
    This identification requirement also applies if a buyer or seller
involved in a transaction is not represented by a real estate associate, but
the other individual involved is represented. Those buying or selling
privately will be asked by the associate representing the other individual
involve to provide personal information and proof of identity as well, and
that record must also be kept by the real estate associate involved in the
    Also under the new FINTRAC regulations, real estate associates dealing
with clients they never meet must also verify their personal information. One
way to do this is for the broker office to hire an associate or mandatary in
the area where the client is located. That associate or mandatary must then
meet the client, verify the identification of the client, and provide the
information to the broker office actually handling the real estate
    "There are buyers, sellers or investors from other countries who rely on
expertise here rather than visiting the property themselves" the CREA
President explains. "They must now meet with an official agent of the Canadian
broker, and provide proof of identity. This agreement will add to the business
costs of the Canadian real estate broker."
    The new regulations also require real estate associates to identify any
third party that may be involved in the real estate transaction. This may be
more common in a commercial or investment transaction, but the law says the
identification information must be recorded if there is a third party involved
no matter what type of property involved.
    In addition to all the verification of id requirements, real estate
associates must also complete a report on the receipt of all funds received
during the real estate transaction, not just those of $10,000 or more.
    In order to comply with these new federal regulations, REALTORS(R) are
required to keep this identification and receipt of funds information on file
for five years and provide it to FINTRAC if requested. It is the individual
broker office that will be responsible for the safe keeping of the
information, and the brokerage that will have to respond to any FINTRAC
information request.
    "Our 5700 members are prepared to deal with these new legislative
changes, and our Board has been keeping them as updated as possible on this
file, and we will continue to support them through whatever means necessary to
ensure that they have an easier time explaining these new changes in the real
estate transaction to consumers," said Calgary Real Estate Board President Ed
    "Our main focus is always the consumer and ensuring that they have the
smoothest and most satisfying real estate transaction possible," ended Jensen.

For further information:

For further information: Ed Jensen, President, (403) 278-6884; Ron Esch,
Executive Vice President, (403) 781-1308

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890