My real estate agent wants to verify my identification using my driver’s licence. Why is this necessary?
I sometimes refer to the Real Estate and Business Brokers Act, 2002 (REBBA), the statute that governs the conduct of real estate professionals in Ontario for the protection of consumers. But they are also obligated to comply with various other laws.
Because large amounts of money exchanges hands in real estate transactions, it’s important that the real estate professionals who facilitate these deals do what they can to ensure that the parties are who they say they are, and that nothing suspicious or potentially illegal is going on. One acceptable method of client identification is government-issued photo identification, like a driver’s licence or passport.
The requirement for photo identification was heightened in 2001 with the introduction of Federal anti-money laundering regulations (the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Act), which are separate from REBBA and something we don’t administer at RECO. Beyond photo identification, brokerages (the organizations that employ salespersons and brokers) are required to implement a compliance protocol to identify and prevent money laundering.
Failing to abide by the anti-money laundering rules that are in place can result in serious consequences (charges from the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, may result in fines of up to $500,000 and up to five years of imprisonment), so it’s imperative that real estate professionals take compliance seriously.
Here’s another question we often get about providing ID:
I went to an open house and I had to give the salesperson my photo ID. Why is that needed?
Open houses are a popular tool that homeowners use to sell their properties, but they come with risk. When someone hosts an open house, they’re opening their home to complete strangers — so it’s in the seller’s best interest to do everything they can to protect their valuables.
In addition to keeping valuable items out of sight (such as jewelry, electronics, medication, bills and bank statements), I always recommend that sellers ask their salesperson or broker to keep a log of all visitors who attend the open house. If this rule is in place, then typically visitors will be asked to show photo identification and complete a registration form. This practice adds a level of security and comfort to the seller.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.