The FINTRAC updates announced on June 1, 2021 must be complied with by real estate agents and brokerages across Canada starting on April 1, 2022. Here are answers to five of the most frequently asked questions I receive when conducting FINTRAC updates for brokerages and real estate boards.

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1. Why should I care about FINTRAC?

To me the main reason is that if a lender is suspicious about any buyer at any time before closing, they can cancel the mortgage commitment. Then the deal may not close and you will not be paid your commission. Do not associate with or represent any suspicious buyers.

2. Why does FINTRAC matter if I do not accept cash as a deposit on any real estate agreement?

FINTRAC is not just about cash. Every bank draft you receive as a deposit on a real estate agreement is suspicious because there is rarely any proof who purchased it or how they purchased it. What about a corporation that buys or sells real estate? Do you know who their shareholders are who actually own the corporation? They could be criminals. All of these are examples of potential money laundering.

3. What are some of the key reminders when completing the FINTRAC ID forms?

All sections need to be completed carefully. The client occupation should be specific because this connects the client to their geographic location. Always ask if the deal is being done on behalf of a third party.

4. What are some of the key new requirements announced June 1, 2021?

Every new client should now be considered to be in a business relationship with your brokerage, regardless how many deals they have done in the past with your brokerage. As such, a proper explanation of the deal should be included in section D of the FINTRAC Identification form. There is also a new Beneficial Ownership Form to complete for every client, which will, for example, ask for details on all shareholders of a corporation who own more than 25 per cent of the shares and whether a buyer may be a Politically Exposed Person.

5. What must a brokerage do now to make sure they comply with their FINTRAC obligations?

Real estate brokerages must make sure they have an up-to-date FINTRAC policy with a FINTRAC compliance officer; that all agents and employees of the brokerage have taken the required FINTRAC training; that a proper brokerage risk assessment is completed every two years; and that a FINTRAC audit is also completed to make sure that your FINTRAC regime is up-to-date. I have completed FINTRAC audits for real estate brokerages across Ontario and in other provinces.

If you have any question related to FINTRAC, or if you want to set up a seminar for your brokerage, do not hesitate to contact me.

11 COMMENTS

  1. Another RBC insult, to customer of 43 years. But good advice: change your bank card PIN number right away. Tangerine and BofM ate the customer lheft loss. Seniors devastated. Where does Fintrac fit in this situation if at all? Do they keep such records…

    Ontario woman warns about choosing credit card PIN after RBC refuses to refund $8,772
    An Ontario woman is warning people about what they choose as their credit card PIN after she said RBC refused to refund nearly $9,000 in fraudulent charges.
    Read in CTV News: https://apple.news/AUzXxovEsT0O4ow_ezYH3iQ

    Shared from Apple News

    Carolyne L 🍁
    Lifestyle and gourmet maven with a giant, successful real estate career history worth sharing

  2. There are other similar stories… far too many. Where is Fintrac in these development situations? Is the developer not responsible to the Ministry?

    And why don’t buyers who are turning over hundreds of thousands of dollars in deposit funds to non-trust account developers doing so?
    Should the developers’ own legal council not be held accountable? in the mismanaging of the whole situation? Insurance is capped.

    When banks open corporate real estate accounts they must have copies of corporate registration documents; should they not be obligated to insist that the corporate accounts include appropriate trust accounts?

    Carolyne L 🍁
    Lifestyle and gourmet maven with a giant, successful real estate career history worth sharing…

    ===
    
    Homebuyers set to lose unprotected deposits of up to $150K after GTA developer refused licences
    Nearly 30 townhouse buyers in two Ideal Developments projects in Richmond Hill, Ont., are likely to lose a total of $2.8 million in unprotected deposit funds after the builder was refused licences by an Ontario oversight body and the projects were cancelled.

    Read in CBC News: https://apple.news/ADo6O3VlmSNOXdcfhhbbzCg

    Shared from Apple News

  3. Every day it seems there’s Canadian bank news. Would this particular manager not have had to fill in Fintrac paperwork to do his transactions? Anyone know the background to this CTV news story? Did Fintrac find him?
    ===
    Former RBC bank manager, three others accused in alleged $10-million Ont. bank loan scheme
    Four people have been charged following a year-long investigation into a multi-million-dollar fraudulent loan scheme in the Greater Toronto Area.
    Read in CTV News: https://apple.news/Ao2X34k2gQbeoUNxcWwRndQ

    Shared from Apple News

    Carolyne L

  4. New banking paper formats at BoM affects other banks

    Canadian banks typically work hand in glove with each other.

    BofM apparently changed its visual paper banking formats and CIBC and Scotiabank operating systems do not recognize those changes as apparently tellers and other front line staff haven’t been made aware of changes to competing bank formats.

    It doesn’t matter if you are banking 2k or 20k, you’d be well-advised not to use paper banking at BoM without checking with your own bank first such as money orders, bank drafts, or what used to be called certified cheques. For sure currently they will result in a hold being applied or completely rejected by other Canadian banking institutions.

    Example, written on BoM paper even when stamped by senior staff including Mgmt, CIBC and Scotiabank systems simply do not recognize that BofM paperwork as genuine usable cash. And tellers in particular have no knowledge. They only know the paper looks different. To them it’s automatically funny money Fintrac overkill. This just happened twice in a month to a well-educated business colleague.

    If you intend to use your BoM paperwork deposited to use elsewhere you will not be able to for up to nine days or longer. One was a BofM bank draft (generally equal to cash) that CIBC completely refused to honour; the other was a certified cheque drawn on BoM and not honoured at a nearby Scotia bank. They simply refused to value it as cash. Not Canadian tender. Teller decision as she had never seen anything from BoM that looked like what the customer presented

    Staff at both other banks had never seen the new BoM paper format.

    I talk about this because some seniors or even younger customers don’t have computers and or printers, and don’t do EFT. And cannot easily get to a branch having to maybe wait two weeks for a live in-person appointment.

    Lisa Raitt is head of CIBC now but there is no way to connect with her. But one cannot even connect with her bank underlings.

    Someone in the upper echelon at BoM and other banks needs to be made aware of what is going on in the everyday paper banking world of ordinary customers. Where’s the fiduciary duty, and to whom?

    If Canadian bank staff cannot get up to date and stay up to date in a cohesive fashion it injures the would be strong, reliable image of the Canadian banking system and puts it at risk, not just at your local branch but dangerous at the international level.

    Realtors and real estate transactions lawyers rely on certified cheques and bank drafts to close transactions; often presented at the last minute.

    Carolyne L

    Sent from my iPhone

    • Here is another banking horror story in today’s news, not Fintrac related but no place on REM to post… it’s so important – and it’s Canadian where we believe we have the most secure banking system…
      confirms that banking systems don’t talk to one another… there’s more to the story than the missing 10k. Read the serious CBC article below.

      Carolyne L

      ===

      $10,000 wire transfer disappears after bank puts it in wrong account

      https://ca.yahoo.com/news/10-000-wire-transfer-disappears-080000234.html

      • There seems to be an undoing of banking systems in Canada… this in today’s news. What are customers to do?

        Carolyne L 🍁
        Lifestyle and gourmet maven with a giant, successful real estate career history worth sharing…

        ===
        BMO customers out thousands of dollars unable to prove fraudulent e-transfers weren’t their fault
        Two Bank of Montreal customers say they want better online security from the bank after their accounts were accessed and thousands of dollars were e-transferred out. BMO won’t get them their money back, saying their accounts were properly accessed, but the customers say they kept their computers secure.
        Read in CBC News: https://apple.news/ANdq6paKkSS2jJQiD_JMVGg
        Shared from Apple News

  5. Interesting article Mark. I could spend a lot of time on each of your 5 issues but let me share a quick thought on two facts you commented on. First, all requirements that came into force on June 1, 2021 must be in place by June 1st, 2021 period. FINTRACs reference to April 1, 2022 means that should FINTRAC inform a Brokerage that they are doing a Compliance Examination on them, FINTRAC will only ask for transactions/records that relate to the June 1, 2021 requirements that occurred after March 31, 2022. Your comment implies that realtors do not have to do anything until April 1st. Not exactly the case.
    Secondly, you reference the fact that every first time transaction with a realtor now results in a Business Relationship (BR), which is true. However the associated activity with every BR is much more than just the few ones you list in your narrative. If you are trying to be helpful Mark may I suggest that you provide all the detail and not just a taste. With the heavy duty fines coming down By FINTRAC on brokerages these days many of the cited deficiencies can arise from too little information being taken as what is required versus being exposed to the whole situation. Too little is never enough. Fines in the 6-figure range these days are proof of that.

  6. Fintrac did nothing for years while all the money laundering was going on in BC, which is approx. 20 or more years! Now all of a sudden they are putting more onus on Realtors. They let lawyers get away with not complying or at least very lax compliance. Typical government BS. Read a book by Sam Cooper, ‘Willful Blindness’ and it will open your eyes to all the corruption that has been going on far too long. I’ve been saying for the last 20 years there is money laundering going on in Vancouver and TO, and nobody is paying attention. Wonder why how prices are so high in these cities, including Montreal? Two words, ‘Money Laundering’.

  7. Always wanted to be a detective. But, an unpaid detective… hmm…
    Also, is fair to rob these government people of their jobs, but doing most of their work…???
    Tsk tsk tsk #Confused

  8. Would it be of any use or value to include a copy of the agent Fintrac report in the agreement of purchase and sale correspondence sent to the buyer and or seller law office? Date sent recorded…

    Carolyne L

    • Lawyers have their own client Fintrac reporting to do. Would this provide a crosscheck? Although likely due to privacy the lawyer wouldn’t be able to share his report. Just thinking out loud; likely the real estate brokerage office would not be permitted to forward to the law office unless of course the buyer signed permission to share.

      Carlos, are you in Canada?

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