FINTRAC fines expose anti-money laundering gaps in Canadian real estate: report

A series of federal penalties against real estate brokerages is offering a clearer picture of where anti-money-laundering compliance is falling short, according to an analysis by national accounting firm MNP.

The Feb. 5 report examines enforcement action taken by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and finds that between 2021 and Nov. 30, 2025, 24 real estate brokerages received administrative monetary penalties totalling more than $2.6 million.

Drawing on FINTRAC public notices during that five-year period, MNP said the largest single penalty was about $282,000, while the average fine was roughly $110,000. 

The report does not account for penalties that have been made public in the last three months. This month, Ontario brokerage Century 21 Heritage Group Ltd. was fined nearly $150,000, a charge the brokerage says it will dispute.

MNP’s findings suggest regulators are focusing less on whether firms have written policies and more on whether those policies are properly designed, implemented and maintained.

What FINTRAC found

MNP’s review found the 24 brokerages cited by FINTRAC had deficiencies across nearly every element of their anti-money laundering (AML) compliance programs.

The most common issues involved policies and procedures. Brokerages are required to document how their AML programs are structured and carried out. 

According to the report, FINTRAC found many did not sufficiently address obligations such as ongoing monitoring of business relationships, third-party determinations and recordkeeping requirements, including receipt-of-funds records.

In several cases, policies lacked detail on client identification, business relationships and ministerial directives. The report says many firms appear to be “struggling with program design and maintenance” and, in some instances, lacked “sufficient coverage and/or implementation of required obligations.”

Reviews, training and recordkeeping

More than half of the brokerages cited had not completed a required independent review of their AML program within the mandated two-year period, MNP found. Known as a prescribed review, the assessment must evaluate the effectiveness of policies, risk assessments and training.

Training deficiencies were also common. Of the 24 brokerages penalized, 15 had gaps in their AML training programs. Some had not developed or documented a training plan or failed to deliver training to staff and salespeople. Others did not specify how often training would occur, how it would be maintained or whether it addressed all required obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Recordkeeping failures were identified in 63 per cent of cases. Missing or incomplete client information, including full addresses and occupations, was among the most frequently cited issues. FINTRAC also noted missing receipt-of-funds details such as account numbers, account types and account holder names. 

Weak governance trends among those penalized

Governance gaps were another recurring theme. Nine brokerages had either not appointed a compliance officer or had named one without ensuring the individual had sufficient authority or resources to perform the role. The report notes that “strong AML compliance begins with leadership accountability.”

Reporting deficiencies were less common but significant. Seven of the 24 brokerages failed to submit suspicious transaction reports despite indicators of suspicious activity. One brokerage did not file a required large cash transaction report.

Ongoing oversight expected

MNP said FINTRAC’s enforcement record indicates parts of the real estate sector are still building compliance maturity. Regulators have emphasized that AML compliance is “not a static obligation but a continuous process of improvement,” requiring ongoing oversight and independent testing.

As enforcement continues, the report suggests brokerages that integrate compliance into day-to-day operations and ensure clear accountability at the leadership level will be better positioned to meet regulatory expectations.