FICA compliancy documents required when selling property

FICA compliancy documents required when selling property

Property sellers - and buyers - should be aware that their Property Practitioners must ask them for the documents which are needed to verify that they comply with FICA (Financial Intelligence Centre Act).

The Act stipulates that accountable institutions may not establish business relationships or conclude transactions with clients unless they have verified the identity of the clients. This applies to estate agencies as well as banks and other financial institutions.

Suppose sellers or buyers are acting on behalf of a third party. In that case, Property Practitioners also need to verify the identity of the third party and make sure the clients have the authority to establish the business relationship or to conclude a single transaction on behalf of the third party.

The verification process must be completed before a property is listed - and not just when it is sold. This is in keeping with the Property Practitioners' Act's requirements of professionalism and legal compliance.

Documents

To comply with FICA, sellers and buyers need to provide Property Practitioners with copies of their identity documents and proof of residence. For example, this could be a bank statement verified by the bank in question and must not be older than three months.

If the seller of a property is a trust, a company or a close corporation, the Property Practitioners will need identity documents and proof of residence for all the members of the relevant entity.

Sellers and buyers should also ask to see copies of Property Practitioners fidelity fund certificates (FFCs). These need to be renewed every year, and outdated FCs are not acceptable. Keep in mind that Property Practitioners without FCs are working outside the law and are not entitled to earn a commission on the sale of a property.

For further peace of mind, sellers and buyers may also wish to ask whether Property Practitioners are members of the Institute of Estate Agents of South Africa (IEASA) or any other professional organisation representing the industry. Membership in the IEASA is not obligatory, but the institute has a code of conduct that members are bound to uphold.

Writer : Sarah-Jane Meyer.