FICA - how does it affect property sales?
Buying a property is a massive decision with numerous factors that have to be taken into careful consideration. Location and budget seem to be two of the most obvious. However, with the increase in money laundering, there are strict legal requirements that potential homeowners and property brokers have to adhere to called FICA (The Financial Intelligence Act).
Since April 1st, 2019 the FICA act of South Africa has become more stringent which is a policy to combat fraudulent and possible terrorist activity. What kind of implications does this entail for those wishing to either buy or sell a property? And what kind of documentation, needs to be collected and possibly submitted in order to ensure that no one is criminally implicated in this new law?
Live Real Estate one of Cape Town's most exciting new real estate property companies is compliant with FICA. They are dedicated to ensuring their clients adhere to all the necessary requirements under the act so every angle is covered. Hence no parties are found guilty in any matter regarding the leasing and sale of residential property.
According to Jolene Alterskye - a representative, from Live Real Estate- The core objective of the act is to enable the identification of proceeds acquired by unlawful practice. This entails companies and institutions with accountability to gather information and data. This data and information must be readily available to investigating authorities, supervisory bodies, the intelligence services and SARS (the South African revenue services). Though, this is only if parties are suspected of contravening the FICA Act.
"We would advise property buyers and sellers to keep a record of their Identity documents, proof of residence, tax numbers, marriage certificates, and documents necessary (all their FICA) and be prepared to state what the source of funds is for the transaction. New brokers are advised that it is their obligation to ask clients for FICA and to keep a record of such FICA in a secure place, as failure to do so shall amount to an offense". - Jolene Alterskye.
This is why it is so vitally important to ensure that potential new homeowners hire the best possible real estate company with a proven track record in terms of leasing and selling a property. This will guarantee FICA compliance and will be the easiest way in ensuring no one is implicated.
"Government looked at the most likely ways criminals could launder their illegal earnings and identified a number of possibilities, including the buying and selling of immovable property. They made the real estate governing body, the Estate Agency Affairs Board, a supervisory body as defined in the Act and made it responsible for ensuring that estate agencies, defined as accountable institutions in the Act were fully aware of their responsibilities to report illegal or suspicious transactions with regard to buying, selling and leasing of immovable property". -https://www.property24.com/articles/fica-and-the-property-sector/15948
Each answerable institution or agency must formulate and implement a Risk Management and Compliance Programme, which addresses the money-laundering risk in each transaction.
"This is crucial to ensure that all aspects of the transaction are dealt with in accordance with legal requirements. Clients do not want to risk that a transaction in which they are involved runs the risk of being tainted with consequences of non-compliance with anti-money laundering requirements". - Jolene Alterskye.
For any more information regarding FICA you can contact Live Real Estate Agency direct, one of their professional and courteous, brokers or property specialists are waiting to enable your property buying experience will be free of hassle and stress.
