Transitional Sales

Information on Sales during the Transition
For home sales contracted prior to February 20, 2009 with closings on or after that date

FINTRAC record keeping and reporting requirements affecting the home building industry come into force February 20, 2009.

Many new home builders will have sales agreements or contracts which were signed prior to that date,  but with closings that take place after it. So, they may not have recorded government-issued ID information during the face-to-face meetings with their clients (or the more extensive information FINTRAC requires on corporations, etc.) But they will need this information if they receive payments directly to their company on or after February 20, 2009.

FINTRAC has explained that builders’ record keeping and reporting requirements for these sales depend on how payments on the sales are received on or after February 20, 2009. As home sales can involve a wide range of specific circumstances, CHBA members should submit any questions they have to FINTRAC directly.

Existing sales agreements

Payments received by others:
If all payments made on or after February 20, 2009, including closing payments, are received by your lawyer and/or by an outside, independent, provincially licensed professional real estate agent/broker, rather than by your company directly, you have no record-keeping or reporting requirements for these sales.

Payments received by you:
If you receive any payments directly from your client or other individual/company on or after February 20, 2009, you must collect both ‘Receipt of Funds’ and ‘Client Identification’ information. FINTRAC procedures require you to meet with your client and see original government-issued ID, or use the combination of two methods of non-face-to-face client identification permitted by FINTRAC. (See the Client Identification Record Checklist – Individuals in Appendix A for details.)

This applies to all payments towards the sale (cash, cheque, etc.) made directly to your company for such things as:
• upgrades
• change orders
• any other additions to the sales agreement/contract
• balances paid on closing

New sales agreements signed before February 20, 2009

In order to minimize the possibility that you will have to go back to clients to collect identification information after a contract or sales agreement has been signed, you may wish to consider putting FINTRAC record-keeping procedures in place immediately.