FICA documents a legal requirement in a property sale

Properties in the northern suburbs of Johannesburg are taking, on average, between six and 11 weeks to sell in the current market, provided they are priced correctly. 

However, there are some stumbling blocks that are holding up the listing of available property stock, the biggest being resistance from sellers when it comes to providing the required Financial Intelligence Centre Act (FICA) documentation before a property can be listed on the market. This is according to Debbie Justus-Ferns, divisional manager of Renprop Residential Resales.

“The limited supply of property in northern Johannesburg is driving demand, and the market is currently buoyant.  This is evidenced by the fact that properties priced below R1.2million are most often selling within a matter of days,” she says. “The various financial institutions also have a bigger appetite for home loan credit, meaning more loans are being granted - specifically 100% loans - which is also influencing the current property market trading conditions.”

Despite this market buoyancy, Justus-Ferns says that one of the factors hindering the placement of property stock on the market by estate agents is many sellers refusal to provide the necessary FICA documentation that estate agents are required to have.

“Estate agents need to have proof that a person is who they say they are before they can list or sell a property,” she says. “This is a legal requirement, as estate agents are required, on request, to prove to the Financial Intelligence Centre and to the Estate Agency Affairs Board that they have complied with these obligations.”

She says this is a very basic requirement that all estate agents should be adhering to. “If an estate agent doesn’t establish that a particular person is the true owner of the property at the start of the transaction and relationship, will they work in the seller’s best interest going forward?,” she asks. 

Justus-Ferns points out that The Financial Intelligence Centre Act, 38 of 2001 requires all estate agents to comply fully with the applicable FICA requirements. “These requirements state that estate agents are obligated to make use of certain designated forms for the purpose of establishing and verifying the identity of their clients. This means establishing and verifying the identities of natural persons who are South African citizens or residents of South Africa; citizens or residents of a country other than South Africa; a close corporation; a South African company or partnership. This means that whether a property being sold is owned by an individual, a company or a trust, these FICA documents will be required by law.”

The same FICA documentation to establish and verify the identity of a person, company or partnership is also required from buyers, landlords and tenants.

Justus-Ferns says that while many sellers, buyers, tenants and landlords may be influenced by the historic perception of real estate as a profession that wasn’t very professional or regulated, things have changed. “The South African real estate industry, through various new laws, policies and operating requirements that are monitored and regulated, has become much more professional in the last couple of years than ever before. Estate agents are now required to obtain an NQF qualification and write PDE exams with continued annual modules, which are governed by the Estate Agency Affairs Board, before they can even operate legally, for example.”

Added to this, she points out that estate agents are now governed by revised Acts and a code of conduct that focuses on professional and ethical behaviour.

“While there may be some estate agents out there who are operating outside of the law and regulations that govern our industry, reputable estate agencies take the business of helping homeowners to sell their property seriously, and comply with the laws and rules of our industry and country,” Justus-Ferns concludes.

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