On June 23rd, 2008 new federal money laundering and anti-terrorist financing regulations came into effect that require real estate agents and brokers to collect personal identification information from buyers and sellers.

WHAT YOUR REALTOR® NEEDS TO DO TO COMPLY WITH THE LAW

The real estate agent you are dealing with is required by federal law to ask for and verify your personal informtion. By providing this information when requested,you will ensure that they can meet their legal obligations. The Act requires REALTORS® to keep identification records, and track all funds (not just large amounts of cash) provided during the real estate transaction.

ID PLEASE

Under the new rules, REALTORS® are required to obtain, record, and retain the personal information of their clients, including date of birth and occupation. To do this, they must ask for a government-issued identification document such as a driver's license, passport, or residency card. You should not provide your Social Insurance card as identification.

REALTORS® are required to keep a record of this information on file in the brokerage for a period of five years. For the purpose of compliance with this law, REALTORS® are not required to keep photo copies of government issued ID, just the factual data contained on it. However, your REALTOR® may make a photocopy of your ID because of other requirements related to the real estate transaction.

ARE YOU A PRIVATE SELLER OR BUYER?

If you are not represented by a real estate agent in this process - in other words, you are buying or slling privately - the law requires the real estate agent that is involved representing the other party, to request your personal information and keep that information on file.

IS THERE ANYONE ELSE INVOLVED?

There are aspects of your real estate transaction that might prompt the real estate agent you are dealing with to ask you for more information. For instance, you may be asked whether you are acting on behalf of a third party while conducting your transaction. This basically means you are following the instructions of someone else in completing the transaction, or someone else (individual or company) is involved in financing the transaction.

If there s a third party involved, your REALTOR® is also required by law to obtain their identification information, and keep that information on file for five years.

DETAILS OF THE DEPOSIT

Every time funds are received by a REALTOR® (e.g. a deposit) during the course of a real estate transaction, they are required to record the amount received and how it was obtained. Your real estate agent then must record this information, and also keep it on file at the brokerage for a five year period.

YOUR INFORMATION IS KEPT CONFIDENTIAL

The only reason the REALTOR® keeps your personal information on file is to comply with the new federal laws. It will not be used in any commercial way, and will not be provided to anyone else except in response to a request from the federal agency responsible for compliance, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The law requires these files be kept at the broker's office for five (5) years.

WHAT YOU NEED TO KNOW ABOUT THE NEW FEDERAL LAW

While Bill C-25 is Canada's newest legislative initiative to curtail money laundering and terrorist financing, we have had legislation since 2001 that required designated industries in Canada (including real estate) to report suspicious transactions of $10,000. or more.

MONEY LAUNDERING

Money laundering is the process used to disguise the source of money or assets derived from criminal activity. This illegal activity can include drug trafficking, smuggling, fraud, extortion and corruption. Criminals must launder the profits and proceeds from these crimes to be able to enjoy them. The scope of criminal proceeds is significant; the International Monetary Fund (IMF) estimated that some $500 billion (U.S.) is laundered worldwide each year.

TERRORIST FINANCING

Terrorist financing operates somewhat differently from money laundering. While terrorist groups do generate funds from criminal activities such a drug trafficking and arms smuggling, they also obtain revenue through legal means. Supporters of terrorist causes may, for example, raise funds from their local communities by hosting events or membership drives. In addition, some charity or relief organizations may unknowingly become the route where donors contribute funds that may eventually be used to commit a terrorist act.