The Hintze Team Blog

DAVID FRIEND

Canadian Press

Fewer people are looking at buying a recreational property, resulting in slower sales, an increased number of listings on the market and prices that are only slightly higher or flat compared with a year ago, according to a report from Re/Max.

The real-estate sales company said this week that of the 45 markets surveyed across the country, about 91 per cent were considered to be transitioning away from a strong selling conditions to one that's more balanced between buyers and sellers.


Despite stabilizing prices, the Canadian recreational market saw a "substantial increase" in property listings for the first four months of this year, Re/Max said.

But fewer properties were selling, Re/Max said. About 67 per cent of the markets reported softer year-to-date sales at the end of April, while average prices were stable or moderately higher over 2007.

Contributing to the slowdown were adverse winter weather conditions during the first four months of the year, worries about a turbulent economy and higher gasoline prices.

Also biting into the market's strength was affordability, which was cited as a key issue in 35 per cent of the markets surveyed.

Prices have climbed in recent years as demand for waterfront locations soared.

"Market conditions have shifted, but don't expect to see bargain-basement prices or fire sales," said Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada.

"The influx of new listings has yet to translate into downward pressure on recreational property prices.

Prime waterfront properties, while more plentiful than in year's past, will still command top dollar."

Re/Max said that a good selection of entry-level waterfront is available across the country with 18 per cent of the markets offering locations with an asking price below $300,000.

Record-Keeping
In addition to your existing requirements under the PC(ML)TFA, once the changes come into effect on June 23, 2008, you will also have to keep a client information record for every purchase or sale of real estate. A client information record will set out your client’s name, address, date of birth and the nature of the client’s principal business or occupation.
If the client is a corporation, you will also need to keep a copy of the part of the official corporate records showing the provisions relating to the power to bind the corporation regarding the transaction.

Identifying Your Clients

Currently, if you have identified an individual before, you do not have to do so again if you recognize the individual. Once the changes come into effect, if you have doubts about the information collected concerning an individual’s previous identification, you will have to identify that individual again.
If the parties in the transaction are each represented by a different real estate broker or sales representative, you will have to identify the individual or confirm the existence of the entity that you represent in the transaction.
If some parties in a real estate transaction are not represented by a real estate broker or sales representative while other parties are, each real estate broker or sales representative that represents a party to the transaction will have to identify or confirm the existence of the parties that are not represented.

Third Party Determination

A third party determination will still have to be made when you receive an amount of cash of $10,000 or more and whenever you create a client information / receipt of funds record.
Is the client acting for a third party? This question is the key consideration in making the third party determination.

Developing a Compliance Program

Currently, you are required to appoint a person responsible for implementing your compliance regime. After June 23, 2008, you will be required to make enhancements to your compliance regime including the following:
· develop, apply and keep up to date written compliance policies and procedures. If you are an entity, they need to be approved by a senior officer;
· develop and maintain a written ongoing compliance training program for your employees, agents or other individuals authorized to act on your behalf;
· establish and document a review of your policies and procedures, risk assessment and training program for their effectiveness. The review will have to be done every two years by either an internal or external auditor or by an individual of your organization if you do not have an auditor;
· New 5th Element – Risk-Based Approach
o assess and document the risk related to money laundering and terrorist activity financing in a way that is appropriate to you considering:
§ your clients and your relationships;
§ your products, delivery channels and geographic areas where you do your business activities; and
§ any other relevant factor.
If you are an entity, within 30 days after the above review, its findings, any updates to your compliance policies and procedures, including their implementation, will have to be reported in writing to one of your senior officers.
If you determine that the risk is high for money laundering or terrorist financing, you will have to take measures to mitigate the risk, and take reasonable measures to:
· keep client identification information up to date; and
· conduct ongoing monitoring of financial transactions to detect suspicious transactions.