Skip to main content

Report On Business Anti-money laundering watchdog boosts efforts to educate real estate agents

Despite FINTRAC's educational campaign, there's still uncertainty on the part of the Canadian Real Estate Association about some of the regulations.

Deborah Baic/The Globe and Mail

The federal agency tasked with curbing money laundering has been stepping up its efforts to educate real estate agents about their obligations to monitor and report suspicious transactions, documents show.

The anti-money laundering watchdog put together a work book and a webinar for real estate agents, and last summer gave a presentation to the Canadian Real Estate Association, according to emails obtained by The Canadian Press through an access-to-information request.

Despite the federal agency's educational efforts, there appears to be some uncertainty on the real estate association's part about some of the regulations.

Story continues below advertisement

Private e-mail exchanges show CREA officials peppering the Financial Transactions and Reports Analysis Centre, known as FINTRAC, with questions about how the rules should be interpreted.

Under federal law, real estate agents are required to identify their clients, verify where their money is coming from and report suspicious or large cash transactions to FINTRAC.

However, a representative of the Canadian Real Estate Association whose name was redacted notes in an e-mail to FINTRAC that compliance in the real estate sector is low.

Meanwhile, the Department of Finance has identified the real estate industry as highly vulnerable to money laundering and terrorist financing given its "very significant" size and the fact that it often involves large sums of money changing hands.

Those looking to hide their identities and the source of their funds can do so by conducting transactions through third parties and using complex corporate structures, the department said in an assessment published last year.

FINTRAC has dedicated "significant time and effort" to working with the Canadian Real Estate Association, the agency said in an e-mail, including reviewing the association's online training, providing feedback on the group's anti-money laundering manual and helping interpret policies.

"What we have found more generally in the real estate sector are issues with compliance regimes, policies and procedures, training, as well as record-keeping and reporting," FINTRAC spokeswoman Renee Bercier said in an e-mail.

Story continues below advertisement

"The level of compliance knowledge and resources varies across the sector and is often a function of an entity's size, capacity and access to resources."

Randall McCauley, vice-president of government and public relations for the Canadian Real Estate Association, admits that compliance is a challenge within the industry.

One of the reasons is because some of the rules are out of sync with how the industry operates, Mr. McCauley says.

For example, under the regulations, an individual who conducts two transactions within several years is considered higher risk and should be subject to additional monitoring, Mr. McCauley says.

However, Mr. McCauley notes that it's very common for a family to sell a home and then purchase a new one within a very short time frame.

"I think there's room for FINTRAC to work with us to understand the nature of the business," Mr. McCauley says.

Story continues below advertisement

Mr. McCauley says CREA has been investing significantly in trying to bring realtors up to speed with federal rules, including sending two representatives on a cross-country tour to deliver presentations to its members.

He says that despite its recent efforts, FINTRAC is not doing its part.

"If you were doing nothing and you do something then technically, I guess, yes that's an improvement," Mr. McCauley says.

The federal agency has also not been very clear in its answers to CREA's policy questions, Mr. McCauley says.

"Any rule, regulation or law is subject to interpretation," he says. "We're asking, 'How would you interpret this regulation?' … and they won't give us a clear answer."

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter