Although it’s common for institutions such as banks and mobile providers to request FICA documents, clients are sometimes surprised when asked for the same by their real estate agent. However, there’s no need for concern — in fact, it should raise a red flag if they don’t ask.
Understanding the FICA Regulations
In South Africa, the Financial Intelligence Centre Act (FICA), 38 of 2001, mandates certain obligations for accountable institutions, including real estate agents, to help combat money laundering and the financing of terrorism. According to the FIC Act, estate agencies are required to retain records that include the client’s identity and verification documents, the nature and purpose of the business relationship, and details of any transactions conducted. These records must be securely stored for a minimum of five years following the end of the business relationship or the completion of the transaction.
In addition, agents must adopt a Risk-Based Approach (RBA) to client verification, assessing the level of risk each client presents and adjusting their due diligence accordingly. Enhanced measures are necessary for high-risk clients or transactions, such as those involving Politically Exposed Persons (PEPs), unusually large or suspicious cash transactions, or clients based offshore.
Real estate professionals must also ensure compliance with the Protection of Personal Information Act (POPIA), especially regarding the secure storage, processing, and sharing of client FICA documents.
Adrian Goslett, Regional Director and CEO of REMAX Southern Africa, says that requesting these documents is not only a legal requirement, “but also a sign that your agent is operating responsibly and in full compliance with the law.”
Real estate agents must verify the identity of their clients before entering into a business relationship or concluding a single transaction above the prescribed threshold. To do so, they will require the following from clients:
For Individual Clients:
- Valid South African ID or passport (if a foreign national)
- Proof of residential address (not older than 3 months)
- Income tax number (where applicable)
For Companies:
- Registration documents (e.g. CIPC certificate)
- Proof of business address
- Identity documents & proof of address of directors
- Resolution authorising the representative to act
For Trusts:
- Trust Deed
- Letters of authority from the Master of the High Court
- ID documents and address verification of all trustees & beneficiaries
“While it might feel like just another layer of admin, complying with FICA is ultimately there to protect you. It serves as a safeguard against fraud and financial crime, helping to ensure that every transaction is conducted with integrity. By working with an agent who follows these protocols, you can be confident that your best interests are being put first,” he concludes.
