Humber/Ontario Real Estate Course 4 Exam Practice

What is a correct requirement for property purchase under FINTRAC suspicious transaction reporting?

1. Buyer pays substantial part of price in cash under table

2. Buyer without knowledge of property buys multiple homes quickly

3. Seller ensures price is far above market value

4. Seller needs precise collaboration with buyer for suspicious purchases

5. Buyer inspects property minutely before purchase

6. Seller questions available buyers carefully

The correct answer is: Buyer pays substantial part of price in cash under table

In the context of FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) suspicious transaction reporting, a significant requirement is to identify and address situations where buyers engage in atypical or potentially illicit financial behaviors. When a buyer pays a substantial part of the purchase price in cash under the table, it raises red flags regarding the source of funds and the intention behind the transaction. This behavior can imply an attempt to evade reporting requirements and create conditions for money laundering or other criminal activities. The nature of cash transactions, especially when they are not properly documented or reported, makes it challenging for financial institutions and real estate professionals to trace the legitimate origins of the funds involved. Thus, such transactions are scrutinized under FINTRAC guidelines because they may contribute to a lack of transparency in real estate dealings. Other options do not align with suspicious transaction indicators as clearly. For example, a buyer without knowledge purchasing multiple homes quickly or a seller collaborating closely with a buyer may not inherently suggest wrongdoing. The emphasis on cash and under-the-table transactions in the correct answer highlights the specific concern FINTRAC has with the potential for non-compliance and illegal financial activities.