Buyers Who Are Purchasing For Someone Else

There are a number of legitimate reasons why the person at your sales desk might be buying on behalf of another person. But criminals and terrorists commonly do this to disguise their money sources and total holdings.

Bottom Line Tip:

Ask buyers if they are purchasing the unit(s) on behalf of a third party. If so, try to get the same identification information as outlined in Individuals buying for themselves, or Buyers who are corporations, partnerships, etc.

What do you have to do?

• Builders have to make an effort to find out whether the person who signs the offer to purchase is acting on the instructions of another person or company (a third party).
• If so, they should record client identification for the buyer, and for the third party, plus the relationship between them and the buyer. Click here for a client information record checklist for individuals, or here for a checklist for corporations, partnerships, cooperatives and other 'entities'.

When do you have to do it?

• when the Offer to Purchase is signed, or
• when you find out there is a third party, if that happens later 

How do you have to record the information?

• As long as the information is in your files and can be made available to FINTRAC investigators if they need it, that is fine.

How long must the records be kept?

• Five years from the completion of the transaction.

 What if you can’t get the documents?

• Sometimes there are legitimate reasons why people might not reveal who they are acting for. A lawyer may buy a property in trust on behalf of a celebrity, for example. In that kind of case, you should note on the file that the lawyer is acting on behalf of a third party, but has been instructed not to identify them. 
• A buyer may also tell you about a third party but not give you the identification documents FINTRAC asks for. That should also be noted on your file.
• If you have reasonable grounds to suspect that there is a third party involved despite the buyer saying there isn’t, you should note that too.
• If there are enough reasonable grounds to suspect the purchase may be involved in money laundering or terrorist financing, you should make a ‘Suspicious Transaction’ report.    More

Special Cases

If a buyer is not in Canada, see Foreign buyers.