Humber/Ontario Real Estate Course 3 Exam Practice

Which FINTRAC requirement applies to brokerages handling real estate transactions?

1. Requirement to verify identification for sales under $200,000

2. Creating a large cash transaction report for any payment of $10,000 or more

3. Maintaining a funds receipt record varying with transaction types

4. Doing a risk assessment of clients every six months

5. Ensuring client signatures on all transaction documents

6. Automating fund transfers for all transactions

The correct answer is: Creating a large cash transaction report for any payment of $10,000 or more

The requirement to create a large cash transaction report for any payment of $10,000 or more is a crucial regulation under FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) that applies to brokerages handling real estate transactions. This requirement emphasizes the importance of monitoring significant cash transactions, as they can serve as a potential indicator of money laundering or other financial crimes. When a brokerage processes a cash payment amounting to $10,000 or more, they must report this to FINTRAC. This is part of the broader anti-money laundering (AML) framework designed to ensure that real estate professionals are vigilant about potential risks involved in their transactions. By reporting these transactions, brokerages contribute to the integrity of the financial system and assist in tracking illicit funds. The other options reflect responsibilities that do not align specifically with FINTRAC’s requirements or lack the emphasis on large cash transactions, which are critical for compliance and risk management in the real estate sector. This distinction highlights that the creation of a large cash transaction report is a key responsibility for brokerages under FINTRAC regulations, aimed at preventing financial crimes and ensuring accountability in real estate transactions.