NEW RULES: Ottawa requires property buyer, seller info
By HANK DANISZEWSKI
The London Free Press
Canadian realtors are bracing for a customer backlash starting today, as
they become new foot soldiers in the battle against money-laundering.
Federal regulations that kick in today will force realtors to start asking
property sellers and buyers personal information never before required.
In Ontario alone, 47,000 realtors will be expected to fall in line or face
stiff penalties.
"We know there is going to be consumer rejection on this and we are just
following the law," said Gerry Weir, a London realtor and president of the
Ontario Real Estate Association (OREA).
Realtors will be required to ask for the name, address, date of birth and
occupation of property buyers and sellers, plus ID such as a driver's
licence or passport.
Weir said Ottawa has made little effort to educate people about the changes,
and realtors feel they're being forced into an uncomfortable enforcement
role.
He said realtors will have to keep the information for seven years and
submit it on request to the Financial Transaction and Reports Analysis
Centre of Canada (FINTRAC), a federal agency set up to track suspicious
transactions that could be related to money- laundering or terrorism.
If the buyer is foreign or from another part of Canada, the real estate
broker will be required to hire an agent in the buyer's community who can
confirm the buyer's ID.
If a client refuses to disclose the information, Weir said, a realtor would
have to walk away from the deal or report the person to FINTRAC.
"Even if I have known you for 30 years, I still have to ask for that
information," he said.
Weir said it could get even worse.
He said Ottawa also wanted to require a receipt-of-funds record, with
information on anyone who actually supplied money for sales, including
relatives or friends.
Weir said the government backed down on that, but he expects it will only be
temporary.
"That is the next step; that will happen," he said.
FINTRAC officials appear confused about the new rules.
Spokesperson Peter Lamey at first said one piece of ID was needed from
buyers and sellers, and information such as date of birth and occupation
wouldn't be required.
He later said the information wouldn't only be required from buyers and
sellers, but also from anyone who contributed money to a deal as part of the
receipt of funds record, contradicting Weir's belief that Ottawa had backed
down on that provision.
Negotiations on the rules were handled by the federal Finance Department and
not FINTRAC, Lamey said.
Weir said he understands the need to deal with the problem of money
laundering.
For years, realtors have been required to report any suspicious financial
transactions to FINTRAC, especially those involving cash payments of more
than $10,000.
Weir said he's reported three transactions in recent years, and two involved
someone trying to buying a house to set up a marijuana growing operation.
Still, he said only a very small number of real estate transaction are
suspicious.
Weir said the government will only do spot inspections during the next six
months to ensure realtors and brokers are meeting the requirements.
After that, any realtor or broker who doesn't meet the requirements could
face hefty fines or jail time.
Weir said the OREA wants to educate people about the changes, but there've
been long negotiations with the government and the rules weren't firmed up
until last week.
"We have 47,000 realtors in Ontario that we have to educate by (today)," he
said.
