FINTRAC stands for The Financial Transactions and Reports Analysis Centre of Canada .
Read one of my recent articles about the new rules about purchasing or selling property in Canada!!
FINTRAC or More Privacy Issues!
If you plan on purchasing or selling a property in the next little while there have been some changes in what information you have to supply to your Realtor. In an effort to combat money laundering and terrorism your Realtor requires some in-depth information on you that he needs to keep for five years.
Some of the information they are required to gather include your name, current address, date of birth, occupation or principal business, and type of id provided to verify this. Now contrary to the Personal Information Protection and Electronics Document Act (PIPEDA) which was enabled to protect your personal information, all of this is now defined under a new category deeming it necessary information to fight money laundering.
Once this information is in the hands of your Realtor, it is the responsibility of the Realtor and brokerage to safeguard it under the PIPEDA rules and legislation. Now I could be mistaken, but doesn’t this take time away from the Realtor doing their real job of assisting in the sale and purchase of property? I’m all for combating money laundering and terrorism, but I’m sure the kind of people who need to launder money through Real Estate have some incredible fake identification and wouldn’t be providing their real information anyway.
Further to this, the Realtors and their brokerage are also responsible for keeping on file every financial transaction through their offices. This one has always been important from an accounting standpoint (I don’t want them to lose track of my deposits!), but now the entire report of all the transactions are available to the government whenever they request. Once again, the Realtor is responsible for storing this for five years as well.
Now we can get to the real meat and potatoes, the “suspicious transaction”. A Realtor is now required to file a report on any suspicious transactions they run into. A reasonable grounds for suspicion could involve any of the following, a large cash down payment, transfers from offshore banks (doesn’t that already give it away?), someone purchasing their own personal property under a corporation, a purchase without viewing the property, multiple properties purchased in a short time, multiple sources of funds for deposit and closing with all cash or a majority of cash.
Although these reasonable grounds are referred to as a judgement call by the Realtor if they err in their judgement they are liable for some very hefty fines and jail terms up to five years. So many will err to the side of safety and file reports and paperwork taking up both government and Realtor time. The Realtor is also protected from any civil or criminal liability once he files, no matter what the repercussions for the individual, as long as the filing was done in good faith.
Maybe it’s just big brother paranoia on my behalf, but every year more regulations, more legislation and more requirements keep popping up getting created. They are occurring in everyday business and even to simple things like school registration. We manage to create more paperwork, more steps and more problems for individuals, while more loopholes open up for the people who abuse the systems. Sometimes we have to step back, makes things a bit less complex and maybe we can slow our world down a bit. In the meantime, get your identification ready for your next Real Estate transaction!
