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In this time of increased criminal activity, it was only a matter of time before the latest wave of crime for achieve real estate. I refer to money laundering. Real Estate Brokers and sales representatives must report suspicious transactions if there reasonable grounds to suspect that the transactions are related to the commission of an offense of money laundering.

The Products Crime (Money Laundering) and Terrorist Financing Act requires Realtors to report suspicious transactions to the Financial Transactions Report and Analysis Center of Canada (FINTRAC). Suspicious real estate transactions come in various flavors, for example, when a customer comes to a close real estate with a large amount of cash (it actually occurred – twice, in both cases in Toronto), or when the client buying a property in the name of a nominee, as a partner or parent. Naturally not all transactions involving candidates are symptomatic of shady dealings, but some may be. Another situation which may raise eyebrows is when customers do not want their name appears on documents connecting with the property they are acquiring, or when they insist on using different names or fictitious business names on documents and forms. Or when they change the name of party purchases the last minute and fail to explain adequately the reasons substitution.

There are, of course, explain the changes that the parties – especially buyers – may wish to make, and some of these explanations are absolutely legitimate. For example, in a recent transaction I was involved when the buyer makes an offer to buy a restaurant in New Westminster and was advised by his own accounting he was competent tax for him to complete the transaction on behalf of its liability company limited. I prepared an amendment to the contract of purchase and sale, if the parties sign it and that was the end of it.

There are cases, however, when changes can be reasonably explained. Take a look at it, was here in Vancouver a few months ago: a buyer has negotiated a purchase price by his agent, but then asked his own agent and the seller's agent to record the transaction to a lower value on all documents, as he would pay the difference in cash "under the table." A quick report to FINTRAC by the two agents placed the day a form of money laundering involving marijuana. A variant of this example is when a seller agrees to sell its assets to below the market value request an additional payment "under the table." And in another recent case (again in Toronto – which does not develop a great reputation these days when it comes to laundering money in real estate), a buyer has to purchase a property in exchange for an upfront payment of large cash and the balance funded by a unique institution offshore banking.

Some of These crooks have no business sense at all. Take for example the tenants who proceeded to rent an apartment here in Downtown Vancouver. The lease term was one year, and the tenant showed up at the gates of the property management company with all twelve monthly payments plus half months deposit … all in CA $ 20.00 cash bills. All CAD $ 15,000 bill to $ 20.00 in advance … Now, tell me if not silent.

When there is a suspicion based on professional real estate has a duty imposed upon him to report the transaction to FINTRAC in 30 days. Once the report is complete, in addition, a real estate professional has a duty not to inform anyone of these communications, including of course the client, if it could harm or otherwise impair a criminal investigation. No prosecution may be instituted against the officer to report in good faith.

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton-Centre Realty in Burnaby, BC.