Real Estate News

Significant money-laundering in B.C. real estate

According to Fintrac reports, not much changed in how real estate is handled and reported over the last two years. This isn't good news for the industry

Hot on the tracks of a report showing how Vancouver-area casinos have been laundromats for international dirty money, B.C.’s government now turns its attention to potential money-laundering through real estate transactions.

While the real estate industry powers a significant percentage of B.C.’s economy, its members as a whole have left much to be desired in terms of transparency. The Financial Transactions and Report Analysis Centre of Canada (Fintrac) conducted 343 examinations between 2015 and 2017, with 130 of them taking place in  B.C.

Most BC brokerages failed Fintrac money-laundering prevention requirements

Fintrac reported that 88% of examinations in B.C. were vulnerable to money-laundering activities, due to “significant” or “very significant deficiencies” in their record keeping, risk assessment, procedures, and client identification obligations.

Fintrac’s findings are similar to a report made two years ago, which uncovered money-laundering vulnerabilities in 89% of B.C’s real estate companies they examined.

“It is obviously troubling that there is such a systematic problem with compliance with the basic reporting requirements for the industry,” said David Eby, B.C.’s Attorney General in a statement made on Monday July 30, 2018. “It is not like there hasn’t been profile on this issue. It’s not like there haven’t been headlines. I don’t understand why the industry almost as a whole feels like there is no need to follow federal law in terms of reporting obligations.”

Governmental review required for BC real estate transactions

Eby went on to highlight the need for B.C.’s government to launch a review of real estate transactions — a promise the government made, but has yet to follow through on. “Is there a reason why these rules aren’t being followed?” Eby said. “I hope our review is going to assist in answering all these questions.”

Leadership of the Real Estate Council of B.C. and the B.C. Real estate Association say they accept Fintrac’s findings, but no one in these organizations would publicly confirm if real estate companies had taken measures to improve their record keeping responsibilities.

Misael Lizarraga
Misael Lizarraga

Misael started as an English teacher in Mazatlan, Mexico but his passion was in real estate. Now, he works with a handful of clients reporting on real estate news from across the world under his primary business: