Client Identification Requirements: What you need to know

Client identification has been an important aspect of every real estate transaction in recent years. Each party involved in a real estate transaction from the realtor to the lender to the lawyer have legislation requirements to fulfill with regards to verifying the client/ customer’s identity.

Agent Requirements:

As a real estate agent you are subject to abide by certain legislation and regulations with respect to confirming your client/customer’s identity and personal identification information. Since June 23, 2008, real estate agents have been required to collect personal identification information from buyers and sellers, and to complete a report on all funds that are received throughout the course of the transaction, even those less than $10,000.

The main requirements that are applicable to real estate agents under this legislation include:
– documentation of personal information and proof of identity of clients in each and every transaction, including occupation;
– if the client is located in another city, province or country, and a face-to-face meeting is not possible, realtors are required to use an agent in that city, province or country, in order to identify third parties and verify the accuracy of their personal information;
– when a buyer/seller is conducting a private transaction, in which a real estate agent is representing the other party involved, the realtor is required by law to verify the private buyer/seller’s information;
– if there is a third party involved in the transaction, a realtor must obtain their identification information;
– any time that funds are deposited or exchanged in a transaction a realtor must complete a report outlining the amount that was received and how it was obtained, no matter what the monetary amount is; and
– in relation to clients who are corporations, realtors must obtain the corporation’s confirmation of existence, the corporation name, the corporation address, the names of the directors, and any other relevant corporate documentation in order to complete an accurate Client Information Record.

What are acceptable forms of identification?

For a document to be acceptable for identification purposes, it must be a valid original document, have a unique identifier number, have been issued by a provincial, territorial or federal government, and it cannot be expired. Acceptable forms of identification verification include but are not limited to a driver’s licence, passport, residency card etc. A realtor only requires the information from one government issued card.

To comply with law, realtors can either make a photocopy of the identification card, or they can simply write down all factual data that is contained on the card, both of which are acceptable. Note: realtors should NOT accept a Social Insurance (SIN) Card as identification. To read more on client identification for real estate access Guideline 6B here.

All of these requirements are to be met for every single transaction that a realtor is involved with, whether they are representing the clients directly or acting for the other side involved in a private transaction. Realtors are required by law to keep this information on record for a period of five years at their brokerage office. This information is collected only to comply with the federal legislation, and is not to be used in any commercial way or given out to anyone else.

Lender Requirements:

When clients are required to sign mortgage documents with their lawyer the lenders require the lawyer to confirm the client’s identity by obtaining a photocopy of two pieces of identification in order to comply with Canada’s Proceed’s of Crime (Money Laundering) and Terrorist Financing Act. Lawyers are also required to sign a form certifying that the lawyer has taken steps to personally examine the identification documents.

Essentially all lenders outline in their mortgage instructions the types of identification that are considered valid. There are both primary and secondary forms of identification and lawyers are required to obtain either two primary pieces, or one primary and one secondary. Note that one piece of identification must be from the list of primary documents. If the required documentation is not received, the lender will not release mortgage funds. The table outlined below is a list of the primary and secondary documents which are commonly considered acceptable:

Primary Identification:
– valid driver’s license issued in Canada;
– a current Canadian passport;
– a federally issued Firearms Licence;
– a Certificate of Canadian Citizenship or Certification of Naturalization;
– a Permanent Resident card or Citizenship and Immigration Canada Form IMM1000 or IMM1442;
– a Certificate of Indian Status issued by the Government of Canada;
– a document or card with your signature and photograph on it issued by any of the following:
– Insurance Corporation of British Columbia
– Alberta registries
– Saskatchewan Government Insurance
– Department of Transportation and Public Works of Prince Edward island
– Service New Brunswick
– Department of Government Services and Lands of the province of Newfoundland and Labrador
– Department of Transportation of the Northwest Territories
– Department of Community Government and Transportation of the Territory of Nunavut

Secondary Identification:
– an employee identity card with a photograph from an employer well known in the community;
– a signed automatic banking machine (ABM) card, client card, or credit card issued by a member of the Canadian Payments Association (a major Canadian bank) showing the individuals name along with their signature;
– a signed Canadian Institute for the Blind (CNIB) client card with a photograph;
– a birth certificate issued in Canada;
– a Social Insurance Number (SIN) card issued by the Government of Canada; and
– an Old Age Security Card issued by the government of Canada.

Lawyers Requirements:

Lawyers must comply with law society requirements that pertain to client identification and verification as outlined in By-Law 7.1 which came out in December 2008. In order to comply with this By-Law, lawyers are not required to obtain photo identification unless they suspect fraudulent activity, dishonesty or illegal conduct is taking place. Lawyers are only required to obtain one piece of identification from the client, and SIN cards are considered an acceptable form. The lawyer must ensure that they obtain and keep a record (for a period of six years) of the following client information:

– full legal name;
– home address and telephone number;
– occupation; and
– business address and telephone number (if applicable).

Although complying with the By-Law can be achieved without obtaining photo identification, you must obtain at least one ID at the outset that contains a photo, as this information is required by mortgage companies/lenders as discussed above. To learn more about the law society requirements pertaining to client identification and verification requirements for lawyers click here.

What if my client does not have photo identification?

If a client does not have an acceptable form of photo identification you should suggest that they apply for an Ontario Photo Card which is government-issued photo identification that allows people who don’t drive and are 16 years of age or over to access government, financial or business services that require proof of identity. Outlined below is some of the important information that the client will require to obtain the card.

How do I apply for an Ontario Photo Card?

Applications for an Ontario Photo Card can be made at your local Service Ontario office. You can also obtain a copy of the application by downloading it from the Service Ontario website. This card can be obtained if:

• you do not drive;
• you are a resident of Ontario; and
• you are 16 years of age or older.

For fraud prevention reasons, an individual is not allowed to hold both a driver’s licence and an Ontario Photo Card at the same time. If you have a driver’s license and want to get an Ontario Photo Card, you have to forfeit your driver’s license. Your driver’s license will be cancelled when you apply for your Photo Card.

What are the costs associated with an Ontario Photo Card?

• Order an Ontario Photo Card: $35
• Renew an Ontario Photo Card: $35
• Replace a lost, stolen or damaged Ontario Photo Card: $10
• Retake a photo for an Ontario Photo Card: $10
• Add or remove an age identifier: $10
• Change information on a Ontario Photo Card: Free

Payments can be made by credit card, debit, cash or certified cheque. Once you have paid for your card you should expect to receive it within approximately 4-6 weeks by mail. The card will expire after five years unless you decide to renew it. To renew the card, you must obtain and fill out a renewal form which must be dropped off at a Service Ontario centre.

For more information on Ontario Photo Cards visit the Service Canada Website by clicking here.

The content of this article is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.