The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has assessed its first fine against a real estate brokerage. HomeLife Effect Realty in Hamilton was fined $27,000 for violating the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
FINTRAC says the brokerage was fined for committing four violations:
- Failure of a person or entity to appoint a person to be responsible for the implementation of a compliance program;
- Failure of a person or entity to develop and apply written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer;
- Failure of a person or entity to assess and document risk; and
- Failure of a person or entity that has employees, agents or other persons authorized to act on their behalf to develop and maintain a written ongoing compliance training program for those employees, agents or persons.
FINTRAC has had the authority to issue administrative monetary penalties in response to non-compliance with the act and related regulations since December 30, 2008. It says penalties are used as a last recourse after other measures to ensure compliance with the law have been exhausted.
“FINTRAC remains committed to working with reporting entities in ensuring compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and related regulations,” says the agency in a news release. “The new penalties are a tool to encourage compliance.”
FINTRAC is an independent federal government agency with a mandate to assist in the detection, deterrence and prevention of money laundering and the financing of terrorist activities.
Bug off Fintrac, this should be a laywers job, not a Realtors.
I think the whole thing is about as useful as the gun registry. We get the info as required by FINTRAC, just to ensure that we don’t incur their wrath (as in $27,000 fines) but the reality is that these stupid reulations won’t stop a single case of money laundering. Everyone the criminals use to buy property for them will be squeaky clean. I don’t know about the rest of the Realtors out there, but I sure as heck can’t tell when someone is laundering money.
I always wonder what stupid thing we’ll be expected to do next.
Once weekly I do my laundry at a local laundromat. One week, I forgot $373.27 in the pocket of one of my pair of jeans, so along with my laundry the money got laundered. Would such an act place me in the money laundering category?
Just a thought. If all this Competition Tribunal stuff gets put into place, who is going to police the members of the public who want to have their listing on MLS? Will they have to comply or get fined? Or if a Seller comes to us and asks us to put their listing on MLS but want no other services from us, are we still responsible to have a FINTRAC form? If there is no agency relationship, we should not be held responsible for all this other stuff. Like I say, just food for thought – hopefully before someone goes off and starts putting a bunch of new rules into place.
This is interesting news. I work hard to comply with all the rules and laws but I know a lot of my colleagues just shrug this stuff off and grumble about big government. A home purchase is one of the largest investments a person will ever make. As real estate professionals, we need to recognize this and the duty of care that we owe our clients and society. Maybe this fine will get the message out.
Good point Bob. I think it goes to heart of what the lawyer (sorry her name eludes me) meant by following all other CREA and Local Board Rules.
Greg – I concur exactly. In the future hopefully that duty of care towards our clients AND the clients of other agents will be what distinguishes the added value professional real estate listing from the $995 throw your property on the MLS and do all the work yourself type of listing.
Do you think they got such a big fine because Fintrac was trying to set an example of them?
To Bob Rempel – I posted this previously and have to talked colleagues in authority since, but there seems to be no answer to the question based on CREA’S wording:
As reprinted in OREA’S Edge: The amendments to the CREA Rules clarify how the rules actually operate. The amended Agency Pillar now states:
==== “A listing REALTOR® must act as agent for the seller in order to post, amend or remove a property listing in a Board’s MLS® System. The nature of additional services to be provided by the listing REALTOR® is determined by agreement between the listing REALTOR® and the seller, subject to the applicable regulatory requirements and the Rules of CREA and Boards/Association.”
====
My words, below:
I believe this is where the confusion is perhaps: “must act as agent” -
equals “agency” – therefore by virtue of – equals fiduciary duty, equals
responsibility, equals representation, equals liability – (and requires therefore that the “agent” [registrant] comply by using the Fintrac forms.)
Although an agent is apparently not required to offer advice, be present
at offer presentations or help the seller negotiate [additional
services???] then the whole apparatus will flip over to buyer (agency)
contracts as well in reality – just sign buyers up to a contract, add
them to a list someplace, but do nothing else for them?, How then is it
that an “agent” can fulfill “the agency” he has been contracted for?
Google presents this definition:
:a consensual fiduciary relationship in which one party acts on behalf
of and under the control of another in dealing with third parties also
:the power of one in such a relationship to act on behalf of another A
principal is bound by and liable for acts of his or her agent that are
within the scope of the agency.
actual agency
:the agency that exists when an agent is in fact employed by a principal
see also express agency and implied agency in this entry
=====
Please tell me I am wrong if I am. And answer the question: Can you or
can you not – contract out of “agency?” as it would flow as a natural
occurence when a listing agent puts a property on MLS and is hired
“only” for the express purpose of so doing…
Backed up by using these CREA words…? “The nature of additional
services to be provided by the listing REALTOR® is determined by
agreement between the listing REALTOR® and the seller, subject to the
applicable regulatory requirements and the Rules of CREA and
Boards/Association.”
These additional services being named as such do not override the undertaken “agency” created, I believe. However, one of my colleagues just informed me, after having talked to specific lawyers, that the lawyers apparently believe you can in fact contract out of agency, by virtue of specifying what you will and will not provide, thereby modifying the contract. HUH? Then will CREA not have to remove the word agent from the stated quote?
How can we “remain an agent,” and contract out of agency at the same time, as defined? Am I the only one with this discussion?
Carolyne L
A licenced/registered REALTOR(r)
Proudly putting my name to my work for 29 years :
CAROLYNE Realty Corp. Real Estate Brokerage (1991)
http://www.carolyne.com
Serving Burlington and Brampton ON CA
Carolyne: I’ve been told that I run on too much with my explanations, and I do, so, is the answer to your question that one would become one’s own sub-agent? This would cause one to develop a split personality, would it not? Who would want a mental case looking after one’s fiduciary duties?
Things keep getting more confusing, and I was confused to start with.
I think I’ll just do what I think is right for each situation and let my conscience be my guide.
Hope I don’t see you in the waiting room at RECO.
Regards,
Brian.
Why would I, Brian, in the “waiting room?” Is it now an offence to ask questions?
Carolyne
Hi Carolyne: I mis spoke. I meant I hoped ‘I’ wouldn’t end up at RECO because of my own potential to screw something up. However, I would hope to see you there when you came to bail me out. Been a long day; been at a funeral…writing to lighten the mood.
Regards,
Brian.