Since October 2025, the Canadian real estate market has been operating under updated anti-money laundering rules. Realtors and sales agents are now required to verify the identity of any unrepresented party in a real estate transaction in accordance with FINTRAC client identification requirements. This amendment closes a long-standing gap in the control system, where one party to a transaction could remain anonymous, creating opportunities for concealed transfers of property.
The changes affected not only brokers, but also developers. Professionals must also determine whether a third party is involved, as required by existing FINTRAC third-party determination obligations, and keep appropriate records. In essence, the legislature has created a symmetrical system in which transparency is required from all participants regardless of whether they use an intermediary.
Starting October 1, 2025, real estate licensees must verify the identity of unrepresented parties — any party involved in the purchase or sale of real estate who is not represented by a realtor or sales representative. In practice, this means that if a seller chooses to work directly with a buyer without involving their agent, the buyer’s broker is still required to verify that seller’s identity.
The definition covers individuals, corporations, trusts, and partnerships. The key criterion is the absence of formal representation through a licensed professional. This creates an additional complication: the broker is forced to interact with a person who is not their client, yet still require confidential information and documents from them. Here the first conflict of interest arises — the unrepresented party may not understand why they should provide data to a “stranger’s” agent.
Traditionally, a broker verified only their direct client — the person who had entered into a service agreement with them. Now the scope of responsibility has expanded. If previously a realtor could focus exclusively on working with the buyer, now they bear equal responsibility for identifying the opposite party, even if that party is working without a representative.
An important nuance: the requirements for verification methods remain the same. As stated in the updated FINTRAC guidance, reporting entities must follow stricter protocols when verifying the identity of individuals and legal entities. This means that a simplified procedure cannot be applied to unrepresented parties — the standard is the same for everyone. This reflects the regulator’s cause-and-effect logic: since money laundering risks do not depend on whether a broker is involved, the protection must be universal.
FINTRAC provides several approved verification methods. The choice of a specific method depends on the circumstances of the transaction, the availability of documents, and the client’s willingness to cooperate. MapleBiz specialists regularly advise brokers on the optimal combination of methods depending on the transaction’s risk profile.
The classic method is checking a government-issued photo ID. An organization may use a genuine, valid, and current photo identification document issued by a federal, provincial, or territorial government. The document must contain the name, photograph, and a unique identification number.
The difficulty arises with remote verification. The updated FINTRAC guidance explains that to verify the identity of an individual by checking an electronic copy of their photo ID, the reporting entity must use software or other technological tools. This requirement raises the entry threshold: it is not enough to ask the client to email a scan of their passport. Specialized solutions are needed to check authenticity features such as watermarks, holograms, and microprinting.
The trade-off is obvious: technological solutions cost money, especially for smaller brokerages. At the same time, they reduce operational risks and speed up the process. In an in-person meeting, the broker can visually compare the photo with the person’s appearance; remotely, biometric analysis or liveness detection is needed. This creates unequal conditions for companies of different sizes.
This method involves verifying current and valid credit file information from a Canadian credit bureau. The check must be performed at the time of account opening or transaction execution — outdated data cannot be relied upon.
The method is effective for Canadian residents with an established credit history, but it creates barriers for foreign buyers or young clients without a credit profile. The credit bureau must confirm a match for the full name, address, and date of birth. Minor spelling discrepancies are permitted, but the organization itself decides whether the differences are acceptable.
The critical point: a credit file check does not require in-person presence and can be performed through automated systems or third-party service providers. This makes the method attractive for remote transactions. However, there is a downside — credit files may contain errors, which can lead to false verification failures.
Under this method, the organization may use current and valid information from two reliable sources — any two of the following options: information from a reliable source that includes the individual’s name and address; information from a reliable source that includes the individual’s name and date of birth; or information that includes the name and confirms the existence of a deposit account, credit card, or other credit account with a financial institution.
The key requirement is the independence of the sources. Two documents from the same issuer cannot be used. Examples of reliable sources include utility bills, tax notices, and bank statements. It is important that the information be current — a document several months old may not pass verification.
The dual method is a compromise between strictness and accessibility. It works even without a government-issued photo ID, which is critical for certain categories of clients. But it requires more time to collect and verify documents, which slows the transaction. For an unrepresented party who is already skeptical of the process, gathering multiple documents can become an obstacle.
Identity verification is only the first step. According to FINTRAC recordkeeping guidance, licensees must maintain detailed records for five years. This period is counted from the date of the last business transaction or the filing of a report, depending on the type of record.
Licensees must keep an information record on unrepresented parties and make the related third-party determination in real estate transactions. The information record includes the full name, address, phone number, date of birth for individuals, or the name, address, and nature of business for legal entities.
Third-party determination is a separate requirement. The broker must determine whether the client is acting on their own behalf or representing someone else’s interests. If the buyer is purchasing property for a relative or business partner, this must be recorded. The logic is simple: the third party may be the ultimate beneficiary whose identity is needed for a complete picture of the transaction.
To comply with recordkeeping requirements, you must store records in a way that allows them to be provided to FINTRAC within 30 days of a request. This means it is not enough to simply archive documents — a fast retrieval system is needed. Electronic storage is permitted if a paper copy can be easily produced. MapleBiz helps brokerages set up document management systems that meet operational access requirements.
The requirement to determine a third party applies to all participants, including unrepresented ones. The broker must ask a direct question: “Are you acting on behalf of another person?” If the answer is yes, information about that person and their relationship to the client must be obtained.
The problem is that the unrepresented party may not understand the importance of disclosing such information or may deliberately conceal it. Here the broker finds themselves in a difficult position: they do not have leverage, as they would with their own client, but they remain responsible for the completeness of the data. The unrepresented party’s refusal to cooperate puts the entire transaction at risk.
Third-party records must include the name, address, date of birth, occupation, and nature of the relationship with the client. If the third party is a legal entity, information about beneficial owners controlling 25% or more of the interest is required. This is a multi-layered check that requires time and legal expertise. For complex corporate structures, specialist assistance may be needed — this is where MapleBiz’s corporate compliance services become indispensable.
Theory is always simpler than practice. The new requirements have created a number of borderline situations where the correct solution is not obvious.
What should be done if the unrepresented party categorically refuses to provide documents? Formally, the broker cannot complete the transaction without fulfilling the verification obligation. This amendment closes a long-standing gap by ensuring that both sides of every real estate transaction are subject to identity verification, meaning there are no exceptions.
Practical strategies include explaining the legal obligations, appealing to the interests of the transaction itself (without verification it will not proceed), and offering alternative methods. If the unrepresented party does not have a passport, a credit file or the dual method can be used. Flexibility in choosing the verification method reduces the likelihood of a dead end.
Nevertheless, if the party persists in refusing, the broker must stop the transaction and possibly file a suspicious transaction report. Refusal to identify oneself may itself be an indicator of illegal activity. A suspicious transaction report must be filed with FINTRAC as soon as possible — in context, the report should be completed promptly, taking into account the facts and circumstances of the situation. This is a balancing act between commercial interests (closing the deal) and legal compliance. Consulting MapleBiz lawyers in such situations helps avoid both violations of requirements and unjustified refusals of lawful transactions.
The new requirements for unrepresented parties have increased the likelihood of detecting suspicious activity. Red flags include unusual urgency, convoluted sources of funding, a mismatch between declared income and purchasing power, and the use of multiple nominees.
Large cash and virtual currency transaction records are required when receiving $10,000 or more in cash or the equivalent in virtual currency. Such transactions are automatically reportable. But a suspicious transaction is defined not only by the amount — it is any transaction where there are reasonable grounds to suspect a connection to money laundering or terrorist financing.
The broker must assess the context: who is involved, where the funds come from, and whether the transaction matches the client’s profile. If the seller is a private individual with no obvious sources of income, yet owns property worth millions of dollars and sells it through intermediaries using offshore transfers, that is a combination of indicators requiring attention.
Important: filing a suspicious transaction report does not mean making an accusation. It is a protective mechanism that passes information to a specialized agency for analysis. FINTRAC will monitor compliance and may impose administrative monetary penalties for violations. Failure to file a report when there are grounds to do so carries serious consequences.
Navigating FINTRAC’s updated requirements requires not only knowledge of the letter of the law, but also an understanding of its spirit. MapleBiz provides comprehensive legal support to brokerages, developers, and other real estate market participants working with cross-border transactions and complex corporate structures.
Our services include: developing compliance programs tailored to your business; auditing existing identification and recordkeeping procedures; training staff in verification methods and suspicious transaction detection; advising on complex cases involving unrepresented parties or refusals to cooperate; preparing for FINTRAC examinations and representing clients in dealings with the regulator.
We pay special attention to clients working with Money Service Business licenses. The new requirements have created additional points of intersection between MSB operators and the real estate market, especially when it comes to large transactions or international transfers. Integrating compliance procedures across different licensed activities is our specialty.
MapleBiz understands that compliance is not only protection from fines, but also a competitive advantage. Clients trust brokerages that demonstrate professionalism in matters of security and transparency. A properly designed verification system speeds up transactions, reduces the risk of deals falling through at later stages, and strengthens the company’s reputation.
Non-compliance is now an offense under the PCMLTFA, punishable on summary conviction by a fine of up to $250,000 or imprisonment for up to two years, or on indictment by a fine of up to $500,000 or imprisonment for up to five years. These penalties demonstrate the seriousness with which the government treats anti-money laundering efforts. Investing in compliance today is protection against catastrophic consequences tomorrow.
If your company is facing difficulties applying the new rules or you are planning to scale your real estate business, contact MapleBiz. We will help you build a reliable system that complies with both the letter of Canadian law and the best international practices. Our experience with cross-border structures and deep understanding of the specifics of Money Service Business allow us to offer solutions tailored precisely to your needs.
