As cryptocurrency popularizes, many industries and professionals are asking serious questions about its practical use. One such industry is real estate. Ontario's real estate regulatory body, the Real Estate Council of Ontario (RECO), has raised concerns about how real estate law might address transactions in bitcoin and other cryptocurrencies.
Currently, RECO is reviewing current real estate law in Ontario to assess whether cryptocurrencies can be legally used for purchases of property in the province. Along with the law, RECO is considering its code of ethics and customer protection issues. One of the differences between cryptocurrency and regular bank funds is that, at this point, it cannot be held in trust. For this reason the Real Estate Council of British Columbia has banned real estate professionals from accepting cryptocurrency.
In Ontario, at least one developer is offering to accept digital currency for preconstruction property. Experts say this is a risk due to the volatility of bitcoin in the marketplace. However, the developer says it is a good way to gain publicity for his projects and no one has actually purchased any preconstruction condominiums with bitcoin.
Under Ontario real estate law, an agent who receives $10,000 or more in cash in a 24-hour period has to send a report to FinTRAC within 15 days. One of the main challenges for RECO is to clarify whether cryptocurrency must be immediately flagged to FinTRAC as a suspicious transaction. As these issues come to the forefront, real estate professionals, buyers and sellers should stay abreast of current legislation. A real estate lawyer can help support anyone involved in a real estate transactions to understand these issues.
Source: The Globe and Mail, "Ontario regulator probes cryptocurrency use in real estate", Shane Dingman, Feb. 22, 2018