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than real estate brokers or sales represen- tatives, which in any calendar year after 2007, have sold properties to the public. These can include five new houses or condominium units, one new commercial or industrial building, one new multi-unit residential building each of which con- tains five or more residential units, or two new multi-unit residential buildings that together contain five or more residential units. "New" means constructed within two years of the sale and not previously occu- pied. Sales to the public include any sale other than to an affiliate or a subsidiary. When selling a new unit, a developer now has the obligation to take different measures in order to comply with the regulations under the act. The principal obligations are: • Maintain receipt of funds records: these records are required when a developer receives any amount from a client, wheth- er or not it is in cash. • Maintain client information records: this information varies if the client is an indi- vidual, an entity, or a corporation. • Ascertaining identity: where a devel- oper has the obligation to maintain a receipt of funds record or a client information record, it is also required to verify the identity of everyone who conducts the transaction. In the case of a corporation, he must determine the names of its directors. • Third-party determination: the devel- oper has to determine whether its client is acting on the instructions of a third party. It is not about determining who owns the money, but rather about who gives instructions to deal with the money. • Compliance regime: the developer has the obligation to implement a com- pliance regime that will enable him to meet his reporting, record keeping, and client identification obligations. FINTRAC has the ability to examine the compliance regime and records and provide feedback to the developer. The Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction reporting regula- tions also impose certain requirements. Subject to certain exceptions, a developer must report to FINTRAC: • all "suspicious transactions," which is a transaction where there are reasonable grounds to suspect that it is related to the commission or attempted commis- sion of a money laundering offence or a terrorist activity financing offence. The developer must maintain a record of all the suspicious transactions reported to FINTRAC; • all transactions involving properties owned or controlled by a terrorist or a terrorist group; and • all "large cash transactions" ($10,000 or more). The consequences of non-compli- ance with the act vary between admin- istrative, up to $500,000 for entities, and criminal penalties, up to $2 million and/or five-years imprisonment. IH Fredric Carsley is head of the real estate law group at Montreal's De Grandpré Chait LLP. [Across the street, down the block or Canada wide — our commercial team is ready for you. ] For over 100 years, legal professionals have trusted Stewart Title to provide title insurance for their commercial real estate transactions. Some of the world's best hotels, golf courses, resorts, office towers and business centres are insured by Stewart Title. Our global reach and financial strength, combined with the expertise of our Commercial Team, enable us to handle the most complex transactions. We can facilitate specialized commercial endorsements for almost any situation. Our title insurance services provide efficient closings and fast turnaround times. With Stewart Title you can close real estate transactions with security and peace of mind. Visit www.stewart.ca to view some of our recent transactions, or call us for a quotation on your next transaction to see us in action. 1.888.667.5151 Untitled-3 1 INHOUSE JUNE 2009 • 12/19/08 10:28:59 AM 9