Definition
A real estate nominee is a person who formally holds property for the benefit of a third party. This practice can be legal (e.g., trust, estate management mandate) or illegal depending on context.
Legal situations: - Legally constituted trust where the trustee holds the property for the beneficiary - Holding mandate for legitimate asset protection reasons
Fraudulent situations (mortgage fraud): - A person with good credit buys a mortgage-financed property but immediately transfers it to someone who couldn't have qualified - The real buyer is never disclosed to the lender or insurer - The lender thinks they are financing the nominee but the real user is different
Consequences: - Criminal mortgage fraud for both the nominee AND the real buyer - Immediate loan recall if the lender discovers the situation - Civil liability between parties
FINTRAC verification: brokers must ask if the buyer is acting for their own account or for a third party.