In January 2008, the new Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act were passed, amending both the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations and the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations passed under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The amendments address transactions involving, among other groups, real estate developers and will come into force on February 20, 2009.
The amendments define a "real estate developer" as:
On any given day in a calendar year, a person or entity who, in that calendar year and before that day or in any previous calendar year after 2007, has sold to the public, other than in the capacity of a real estate broker or sales representative,
- five or more new houses or condominium units;
- one or more new commercial or industrial buildings; or
- one or more new multi-unit residential buildings each of which contain five or more residential units, or two or more new multi-unit residential buildings that together contain five or more residential units.
The amendments impose mandatory reporting and record-keeping requirements on real estate developers, who will be obligated to report suspicious transactions, large cash transactions and any property in their possession that is owned or controlled by terrorists. They will also be required to:
- keep records of funds received, large cash transactions and client information;
- keep copies of official corporate records and suspicious transaction reports;
- ascertain the identity of any individual:
- who conducts a large cash transaction, and take reasonable measures to determine whether that individual is acting on behalf of a third party;
- for whom they must keep a client information record or receipt of funds record; and
- for whom they must send a suspicious transaction report; and
- develop a compliance regime that includes, among other things, the appointment of a compliance officer, written compliance policies and ongoing compliance training programs.
If real estate developers fail to comply with these requirements, then criminal or administrative penalties may be imposed. A number of regulatory instruments and guidelines regarding the new obligations are available on the website of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC ). We would be pleased to answer any questions you may have and to assist you in developing a compliance regime.
Green Communities Legislation
The Local Government (Green Communities) Statutes Amendment Act (2008) came into force in 2008 and amends the Community Charter, the Greater Vancouver Sewerage and Drainage District Act, the Greater Vancouver Water District Act, the Local Government Act and the Vancouver Charter.
Among other things, the amendment requires local governments in British Columbia to include greenhouse gas reduction targets and strategies in community and regional growth strategies by 2010/2011. The amendment also gives local governments and municipalities that are subject to the Vancouver Charter, the Local Government Act or the Greater Vancouver Sewerage and Drainage District Act the jurisdiction to exempt small unit housing from development costs charges (DCCs, or development cost levies under the Vancouver Charter) in order to encourage green development. Accordingly, DCCs will no longer be payable with respect to the construction, alteration or extension of self-contained dwelling units in a building authorized under a building permit if each unit is no larger in area than 29 m2 and the units will only be put to residential uses. The local governments may, by bylaw, establish an area greater than 29 m2.
The amendment also grants local governments the power to reduce DCCs in respect of "eligible developments," which must fall under one of the following categories:
- not-for-profit rental housing, including supportive living housing (this category is not an available category under the Vancouver Charter);
- for-profit affordable rental housing;
- a subdivision of small lots designed to result in low greenhouse gas emissions; and
- a development designed to result in a low environmental impact.
Further, with respect to the Local Government Act and the Greater Vancouver Sewerage and Drainage District Act, the Minister may make a regulation establishing, restricting or establishing criteria, for determining, what constitutes an eligible development. The amendment also provides local governments with the jurisdiction to impose DCCs in respect of the construction, alteration or extension of a structure with fewer than four self-contained dwelling units and where the value of work does not exceed $50,000 (or an amount set by bylaw).