25 June 2008

Can I See Some ID Please?

Effective 23 June 2008, new federal laws and regulations dealing with money laundering and anti-terrorist financing will require real estate agents and brokers to collect and verify more personal information from buyers and sellers. Real estate agents must also now track the source of funds received during the course of a real estate transaction. 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.

Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) will enforce the new rules requiring that verified personal information be kept for each and every real estate transaction in Canada. Real estate agents are now required to ask for proof of the identity of all buyers or sellers involved in a Canadian real estate transaction.In addition to verification of personal information, real estate agents must also complete a report on the receipt of all funds received during the real estate transaction.

If the client is a corporation, that information must include corporate documentation, and the names of the corporation directors. They must also ascertain if a third party is involved in the transaction. These rules also apply if a buyer or seller involved in a transaction is not represented by a real estate agent, but the other individual involved is represented.

These new rules are going to increase the work load and cost of doing business for Realtors. Will it make Canada any safer? Only time will tell.