A real estate agent in Alberta receives a $25,000 deposit from a client in cash for a property purchase. What immediate actions must the agent take?

Q: What is the correct answer to: A real estate agent in Alberta receives a $25,000 deposit from a client in cash for a property purchase. What immediate actions must the agent take?

The correct answer is Verify the client's identity, deposit in trust account, and file an LCTR within 15 days. Option C correctly identifies all three mandatory steps under FINTRAC regulations: client identity verification (required for all large cash transactions), depositing funds in the brokerage trust account (standard fiduciary duty), and filing a Large Cash Transaction Report (LCTR) within 15 days of receiving cash of $10,000 or more. This comprehensive approach ensures full compliance with both provincial real estate regulations and federal anti-money laundering requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Q: What background knowledge is needed for this Regulatory Compliance question?

FINTRAC requires reporting entities, including real estate brokerages, to file Large Cash Transaction Reports (LCTRs) for cash receipts of $10,000 or more within 15 days. This includes verifying client identity using acceptable documentation. Trust account requirements under provincial legislation (like RESA in Alberta) mandate immediate deposit of client funds. These dual obligations reflect Canada's commitment to combating money laundering while protecting client funds through proper fiduciary practices.

Q: What is a good way to remember the answer to this Regulatory Compliance question?

Remember VDR: Verify identity, Deposit in trust, Report to FINTRAC. Think of a VDR (Video Disk Recorder) that captures everything - you must capture (verify) the client's identity, store (deposit) the funds safely, and record (report) the transaction. When you see large cash transaction questions, immediately think VDR. Check that all three elements are present in the correct answer: client verification, trust account deposit, and FINTRAC reporting within 15 days.

Q: What exam tip applies to this Regulatory Compliance question?

For large cash transactions ($10,000+), always look for the answer that includes client identity verification AND FINTRAC reporting. Incomplete answers missing either element are typically wrong.

Q: How does this Regulatory Compliance concept apply in real world practice?

A buyer approaches your brokerage with $30,000 cash for a deposit on a downtown condo. You must first verify their identity using government-issued photo ID and record their information. Next, immediately deposit the cash in your brokerage trust account and provide a receipt. Finally, complete and file the LCTR with FINTRAC within 15 days, including all required client and transaction details. This protects both your license and helps prevent money laundering.

Question

Regulatory ComplianceTrust Accounts And FINTRACABMEDIUM

A real estate agent in Alberta receives a $25,000 deposit from a client in cash for a property purchase. What immediate actions must the agent take?

Answer Options

A

Deposit the funds in the trust account and file an LCTR within 15 days

B

Refuse the cash payment and request a certified cheque instead

C

Verify the client's identity, deposit in trust account, and file an LCTR within 15 days

D

Accept the cash but report it to RECA before depositing