Why Your Real Estate Brokerage Needs to Act Before More FINTRAC Penalties Arrive
A Wake-Up Call for Real-Estate Professionals
In late 2025, FINTRAC imposed administrative monetary penalties against five separate Canadian real-estate brokerages, with fines ranging from tens of thousands to over one hundred thousand dollars. These firms were found to have committed between 2 and 6 violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations. The message for real-estate firms is clear: the regulator is paying close attention, and non-compliance carries real consequences.
As a real-estate brokerage, whether you’re handling residential, commercial or mixed-use deals, you must treat anti-money laundering (AML) compliance as central to your operations, not just a checklist.
What Were the Most Common Violations?
The public listings of the penalties reveal common themes across the cases, which include:
Failure to properly verify identity of clients: real estate agents/mandataries in these brokerages did not meet the minimum client-identification obligations under PCMLTFA for the services they provided.
Inadequate record-keeping and documentation: certain brokerages failed to retain required files (such as proof of source of funds, beneficial-ownership details, or transaction records) for the required retention period.
Missing or ineffective risk assessment and policies: some firms did not document or apply an enterprise-wide risk assessment for money-laundering/terrorist-financing risk pertaining to real-estate activity; their policies and procedures were outdated or not approved at senior level.
Failure to implement adequate training or review the compliance program: the regulator found deficiencies in how staff were trained, how the compliance officer oversight functioned, and how the program was tested or audited.
These violations illustrate that real‐estate firms are being held to the same kinds of AML program standards as more “traditional” financial services firms. What’s new is the growth in attention on real-estate as a laundering channel.
Why Real-Estate Firms Are High Risk
Property transactions often involve large sums of money, third-party payments, shell companies or trusts, cross-border participants and sometimes cash or cryptocurrency. These attributes make real estate an attractive route for laundering illicit proceeds. Recognising this risk, FINTRAC is intensifying supervision of the sector, meaning brokerages must not treat compliance as a back-office function, but as a core part of their value-proposition to clients.
If your firm does not have robust client onboarding, transaction-monitoring practices or appropriate escalation/record pathways, you expose yourself to regulatory, financial and reputational risk.
Key Actions Your Brokerage Should Take Now
To avoid falling into the same governance gaps that triggered those recent penalties, your brokerage should take these practical steps:
Conduct a full risk assessment of your business model: consider location, type of clients (e.g., foreign purchasers, corporate buyers), payment channels (cash, crypto, third-party payments) and whether intermediaries are involved.
Update or create written policies & procedures: ensure you have clear documentation on how you conduct KYC (including beneficial-ownership checks), how you treat unusual payments (e.g., large cash deposits, third-party funding), records-retention rules (at least five years) and escalation of suspicious transactions.
Appoint a compliance officer and ensure proper oversight: the compliance officer should have authority, senior-management backing, and regular reporting to the board or owners.
Train your agents and staff regularly: Provide role-specific training for sales agents, back-office staff and compliance teams that covers real-estate-specific money-laundering red flags, documentation requirements and record-keeping.
Implement documentation workflows: Ensure you collect proof of identity, source of funds, bank references when needed, funds traceability (especially if large amounts, cash or crypto involved), and maintain a secure file system of client/transaction files.
Review and test your compliance program at least every two years: Some brokerages hit by penalties lacked evidence of program tests or audits. Conduct an independent evaluation, identify gaps, fix them and document the corrective actions.
How We Help Real-Estate Firms Stay Compliant
At Platino Consulting, we specialise in supporting real-estate brokerages, developers and agents with building and maintaining viable AML programs. Our services include:
A full compliance gap assessment, benchmarking your current state against regulatory expectations.
Risk-assessment workshops tailored to real-estate risks (cash transactions, trusts, foreign buyers, third-party funding).
Drafting or updating your policies, procedures and records-retention framework so you’re exam-ready.
Designing training programs for agents and compliance teams — including real-estate-specific red flags, client ID, payment traceability and reporting obligations.
Preparing you for regulatory examination or audit, including mock FINTRAC visits, remediation plans, documentation-review checklists and remediation support.
With the right partner, compliance becomes a competitive advantage — your brokerage can demonstrate to clients, investors and regulators that you operate transparently, safely and responsibly. Contact Platino Consulting today to give your clients and stakeholders peace of mind.
