Humber/Ontario Real Estate Course 4 Exam Practice

If a buyer's transaction appears suspicious, what must the real estate professional do?

1. Report immediately to law enforcement

2. Carry out client due diligence to confirm suspicion

3. Inform the brokerage's compliance officer

4. File a suspicious transaction report

5. Cease transactions with the client

6. Draft a formal letter to governing authorities

The correct answer is: File a suspicious transaction report

When a real estate professional encounters a suspicious transaction, filing a suspicious transaction report is the appropriate course of action. This requirement aligns with regulatory obligations that professionals must adhere to in order to combat money laundering and other illicit activities. A suspicious transaction report serves to alert the relevant authorities about potential criminal activity, allowing them to take further investigative action. This approach is not only essential for maintaining ethical standards in the profession but also for protecting the integrity of the real estate market. The report becomes a part of broader efforts to track and prevent financial crimes, enabling law enforcement to analyze patterns and respond effectively. While other options may suggest various levels of involvement, they do not fulfill the direct regulatory responsibility that comes with recognizing suspicious activity. The prompt filing of the report ensures transparency and adherence to legal requirements, which is of utmost importance in real estate transactions.