Why Is My Real Estate Agent Asking for My Banking Details for a Deposit?
Understanding Deposit Requirements, FINTRAC Rules, and Anti-Money Laundering Compliance in Real Estate
If you’re in the process of buying a home in North or West Vancouver and your real estate agent asks for banking information when you submit your deposit, you might be surprised. It’s a common question:
"Why does my agent need these details just to take my money?"
The short answer: it’s the law. Real estate professionals in Canada are subject to strict financial reporting and record-keeping rules to help prevent money laundering and other illegal activity. These rules are part of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
What Is the PCMLTFA and Why Does It Matter?
The PCMLTFA is a federal law that requires certain businesses and professionals—including real estate brokers, sales representatives, and developers—to track and report financial transactions that could be linked to criminal activity. These obligations are enforced and monitored by FINTRAC.
What Is FINTRAC?
FINTRAC, or the Financial Transactions and Reports Analysis Centre of Canada, is a government agency responsible for collecting, analyzing, and disclosing financial intelligence. Its mandate is to detect, prevent, and deter:
- Money laundering
- Terrorist financing
- Threats to the security of Canada’s financial system
As part of this mandate, FINTRAC requires real estate professionals to maintain specific records—such as Receipt of Funds Records—whenever they handle money from clients.
What’s a Receipt of Funds Record?
When you submit a deposit as a buyer, the brokerage receiving the funds must create a Receipt of Funds Record. This record must include:
- Date the funds were received
- Amount of the deposit, and how much (if any) was in cash
- Method of receipt (e.g., wire transfer, cheque, in person)
- Currency involved and exchange rate, if applicable
- Banking details, including:
- Account number
- Type of account
- Name(s) of the account holder(s)
- Purpose of the transaction (e.g., deposit on a property purchase)
- Information about the individual or entity providing the funds, such as:
- Full name, address, and date of birth
- Occupation or nature of business (if it’s a company)
If the Deposit Comes from a Corporation
When a corporation is providing the deposit, the brokerage must also obtain and retain documents that prove who is authorized to act on behalf of the company. This could include:
- Articles of Incorporation
- Corporate bylaws listing signing officers (e.g., president, treasurer)
When Another Brokerage Holds the Deposit
If your deposit is submitted to a trust account held by a different brokerage (for example, the listing agent’s brokerage), your own agent still has compliance obligations. They must:
- Attempt to collect the required information
- Record the fact that a trust account held by another brokerage is involved
- Note any missing information if reasonable efforts were made to obtain it
How Long Is This Information Kept?
Receipt of Funds Records must be retained for at least five years from the date of the transaction. Brokerages are responsible for ensuring these records are secure and available for review if FINTRAC audits or requests them.
Why All This Matters
While it might feel like overkill to provide detailed personal and banking information just to put down a deposit, these requirements are designed to protect the integrity of Canada’s real estate market.
By complying with the PCMLTFA and cooperating with FINTRAC’s oversight, real estate professionals help prevent illegal money from entering the system—and ensure that transactions like yours remain safe and legitimate.
What This Means for You as a Buyer
Real estate transactions come with a lot of moving parts—and sometimes, unfamiliar requests. If you're asked to provide banking information when making a deposit, know that it's not unusual, and it's not personal. Your real estate agent is simply following Canada’s legal requirements to ensure every transaction is documented, transparent, and compliant with national anti-money laundering regulations.
Understanding how the PCMLTFA and FINTRAC reporting requirements apply helps clarify why this information is needed—and how it helps protect everyone involved in the transaction.
If you have questions about deposit requirements or what’s involved in providing your banking details, don’t hesitate to reach out. Our team is always happy to walk you through the process and ensure you feel confident every step of the way.