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.
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, Adrian Goslett, Regional Director and CEO of REMAX Southern Africa, says 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 Legal Entities (e.g. companies, trusts):
- Registration documents (e.g. CIPC certificate)
- Proof of business address
- Identity documents of directors/trustees/members
- Proof of address for each beneficial owner
- Resolution authorising the representative to act
FICA compliance is the legal baseline. It is the minimum standard that every estate agent operating in South Africa must meet, and meeting it is not optional. But in my experience, FICA compliance alone is not sufficient to protect clients from the full range of fraud risks that exist in the South African property market today, according to Morné Prinsloo | REMAX Town and Country.
South Africa was grey-listed by the Financial Action Task Force in 2023 due to identified weaknesses in the country's anti-money laundering and counter-terrorism financing framework. The property sector was specifically identified as a high-risk environment. Since then, compliance requirements have been strengthened and enforcement has increased, but the fraud risks have not diminished. If anything, they have become more sophisticated.
What FICA requires from estate agents
Under the Financial Intelligence Centre Act 38 of 2001, as amended, estate agents are classified as accountable institutions. This means specific legal obligations apply to every transaction. Agents must verify the identity of every client, both buyers and sellers, using a South African identity document or valid passport for foreign nationals. They must obtain proof of residence not older than three months. They must establish the client's tax number and verify the source of funds used in the transaction.
Agents must also report any cash transactions above R24,999.99 to the Financial Intelligence Centre, and they must file a Suspicious Transaction Report when any transaction or proposed transaction raises concerns about money laundering, terrorist financing, or the proceeds of crime. These reports go to the FIC, which analyses them as part of South Africa's broader financial intelligence framework.
Estate agency businesses are required to register with the FIC, appoint a compliance officer, and maintain a written risk management and compliance programme. Agents must be trained on that programme and must check clients against the targeted financial sanctions lists published under the FIC Act and the Protection of Constitutional Democracy Against Terrorist and Related Activity Act.
Where FICA ends and vigilance begins
FICA identifies and verifies. It does not always reveal the full picture of what a transaction is actually about. "The fraud risks I am most alert to in the current market go beyond what a compliance checklist will catch.
"Identity fraud in property transactions is a documented and growing risk. Criminals have impersonated property owners, submitted fraudulent transfer documents, and in some cases successfully transferred properties without the genuine owner's knowledge. An agent who is alert to this risk looks for inconsistencies between the person in front of them and the identity document they have provided, checks that the person's contact details are consistent across all documents, and is cautious when a transaction is being driven remotely with limited direct contact with the principal," he says.
Prinsloo explains that email compromise fraud targeting conveyancers and buyers is another significant risk. Criminals intercept email communication between parties in a transaction, substitute fraudulent banking details for the correct ones, and divert transfer payments. While this risk sits primarily in the conveyancing process rather than the agent's direct sphere, an agent who understands it and warns clients to verify banking details by telephone before making any payment is providing a meaningful layer of protection.
Money laundering through property is the third category. Property has historically been used to clean illegitimate funds because large transactions are a natural vehicle for moving significant amounts of money. An agent who receives cash payment for a deposit, or who is asked to structure a transaction in an unusual way that does not reflect the genuine commercial arrangement, should treat this as a serious concern requiring escalation to the compliance officer and potentially a Suspicious Transaction Report to the FIC.
What to do in practice
Prinsloo treats every unusual element of a transaction as worth investigating. I am not in the business of assuming the worst about clients. "But I am in the business of asking the right questions when something does not add up. A buyer who is reluctant to provide standard FICA documents, a seller who wants to keep a transaction off formal channels, or a transaction where the structure of the deal seems designed to obscure who is really paying or receiving the money are all situations that warrant careful attention.
"FICA is the foundation. Professional vigilance is what makes the foundation meaningful," he adds.
Estate agents are increasingly becoming the first line of defence against property related financial fraud in South Africa
South Africa’s property sector is facing growing exposure to sophisticated financial fraud, cybercrime and identity related scams, placing increasing pressure on estate agents to identify suspicious activity long before a transaction reaches registration stage.
According to Antonie Goosen, principal and founder of Meridian Realty, compliance with FICA requirements remains essential, but modern fraud risks now extend far beyond basic document verification. “FICA is the starting point, not the finish line. Fraudsters have become far more sophisticated and estate agents are often in the best position to spot unusual behaviour early in the process.”
He says property transactions remain attractive targets for criminals because of the large sums of money involved and the pressure buyers and sellers often face to move quickly. "We are seeing more attempts involving fake proof of payment, identity manipulation, intercepted emails, fraudulent banking details and even impersonation of buyers or sellers,” he says.
According to Goosen, experienced agents often detect problems through inconsistencies rather than obvious red flags. “It could be unusual urgency, reluctance to meet in person, conflicting information, pressure to change banking details at the last minute, or buyers trying to avoid normal processes,” he explains.
He says estate agents should never rely solely on emailed documentation without independent verification. “One phone call can prevent enormous losses. If banking details suddenly change during a transfer process, verification through trusted direct contact is absolutely critical.” He warns that cybercriminals increasingly target conveyancing transactions by intercepting communications between buyers, sellers, attorneys and agents. In many fraud cases the emails look legitimate,” he says. “The criminal may have been monitoring communication chains for weeks".
He believes regular client education has become part of an agent’s professional responsibility. “Buyers and sellers should be warned upfront never to transfer funds without independently confirming account details. Agencies should also invest in stronger internal controls, staff training and secure communication procedures. Fraud prevention cannot depend on one individual noticing something suspicious. There needs to be a culture of vigilance throughout the business".
He adds that property practitioners should not be afraid to pause a transaction if something appears irregular. “There is often pressure to keep deals moving, but slowing down for verification is far better than dealing with financial losses later. According to Goosen, trust remains one of the most valuable assets in the property industry, particularly as fraud risks continue to evolve. “People are making life changing financial decisions when they buy or sell property. Agents have a responsibility to protect not only the transaction, but also the people behind it".
