Why Title Insurance Companies Are Now Reporting Entities in Canada

If you’ve bought or sold real estate in Ontario recently, you may have noticed that title insurance companies are asking for more information than they used to. This is because title insurance companies became “reporting entities” under Canada’s anti-money laundering legislation effective October 1, 2025. This article explains what this means and why it matters.

What Are Reporting Entities?

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, certain businesses and professionals are designated as “reporting entities.” These entities have legal obligations to:

• Verify the identity of their clients
• Keep records of transactions
• Report suspicious transactions to FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada)
• Report large cash transactions
• Understand the source of funds in transactions

Why Title Insurance Companies Are Reporting Entities

Title insurance companies were added to the list of reporting entities effective October 1, 2025, because they are involved in real estate transactions, which can be used for money laundering. Real estate is attractive to money launderers because:

• Properties have high value
• Transactions are complex with many parties involved
• Ownership can be obscured through corporations or trusts

By requiring title insurance companies to verify identity and report suspicious transactions, the government aims to make it harder to use real estate for money laundering.

What This Means for Real Estate Transactions

Identity Verification

Title insurance companies must verify the identity of:

• Buyers
• Sellers
• Anyone providing funds for the transaction (like parents who gift down payments)
• Beneficial owners of corporations or trusts involved in the transaction

This typically requires:

• Government-issued photo identification
• Proof of address
• Additional documentation for corporations or trusts

Source of Funds

Title insurance companies must understand where funds are coming from, including:

• Down payments
• Mortgage proceeds
• Gifts from family members
• Other sources

When funds come from third parties (like gifts from parents), those parties may need to provide:

• Identification
• Information about the source of their funds
• Confirmation that the funds are a gift (not a loan)

Record Keeping

Title insurance companies must keep records of:

• Identity verification documents
• Transaction details
• Source of funds information
• Other relevant documentation

These records must be kept for specified periods (typically at least five years).

Reporting Obligations

Title insurance companies must report to FINTRAC:

• Suspicious transactions
• Large cash transactions ($10,000 or more)
• Other specified transactions

Impact on Real Estate Transactions

More Documentation Required

Buyers and sellers may need to provide more documentation than in the past, including:

• Detailed identification
• Proof of address
• Information about the source of funds
• Documentation from third parties who provide funds

Potential Delays

If required documentation is not provided promptly, transactions may be delayed. Title insurance companies cannot issue policies without completing their FINTRAC obligations.

Third-Party Verification

When funds come from third parties (like parents who gift down payments), those parties may also need to provide identification and documentation, which can add complexity to the transaction.

Who Else Are Reporting Entities?

Title insurance companies are not alone. Other reporting entities in real estate transactions include:

• Lawyers
• Real estate brokers
• Mortgage brokers
• Financial institutions
• Others involved in real estate transactions

This means you may encounter FINTRAC requirements from multiple parties in a single transaction.

Common Scenarios

Gifted Down Payments

If your down payment comes from a family member, the title insurance company will typically need:

• Identification from the gift giver
• A gift letter confirming it’s a gift (not a loan)
• Information about the source of the gift giver’s funds (if significant)

Corporate Purchases

If a corporation is buying property, the title insurance company needs:

• Corporate documentation
• Identification of beneficial owners
• Information about the corporation’s business and source of funds

Trust Purchases

If a trust is involved, additional documentation is typically required about:

• The trust structure
• Trustees and beneficiaries
• The source of trust funds

What You Can Do

Plan Ahead

If you’re planning a real estate transaction, be prepared to provide:

• Proper identification
• Proof of address
• Information about the source of funds
• Documentation from anyone providing funds

Understand the Requirements

Understanding why these requirements exist can help you prepare and avoid delays.

Work with Your Lawyer

Your lawyer can help you understand what documentation is needed and coordinate with the title insurance company.

Be Patient

These requirements are mandatory, and title insurance companies cannot proceed without completing them. Being patient and providing requested documentation promptly can help avoid delays.

Key Takeaways

• Title insurance companies are reporting entities under FINTRAC and must verify identity and understand source of funds
• These requirements apply to buyers, sellers, and anyone providing funds for transactions
• Failure to provide required documentation can delay transactions
• These requirements are mandatory and cannot be avoided
• Planning ahead and understanding the requirements can help avoid problems

Related Content

• Real Estate Law in Ontario
• Case Study: Jordan — Title Insurance and Reporting Entity Questions at Closing

This article is for informational purposes only and does not constitute legal advice. Every situation is unique, and the information here may not apply to your specific circumstances. For advice tailored to your situation, consult with a qualified legal professional licensed to practice law in Ontario.