There’s recently been a key update regarding the timing of FICA verification, set out in Guidance Note 7A, which clarifies when agents need to verify their clients.
Timing of Verification: What Has Changed?
Previously, there was some uncertainty about when Property Practitioners (Agents) should complete the FICA verification process. The latest guidance confirms that:
- You may accept a mandate from a prospective client before completing their FICA verification. This means that you can begin marketing a property or sourcing potential buyers or tenants without finalising the verification process.
- You must, however, complete the FICA verification before concluding a transaction. This means that all verification documents and checks must be completed before all parties sign an offer to purchase or a lease agreement.
What This Means for Property Practitioners
This clarification provides real estate professionals with more flexibility in initiating client relationships while still ensuring compliance before finalising a transaction. Agents should implement efficient internal processes to:
- Collect and verify required FICA documents (e.g., proof of identity and address) early in the transaction process.
- Educate clients on FICA requirements to avoid last-minute delays when signing contracts.
- Maintain accurate records to ensure compliance in case of an audit by the Financial Intelligence Centre.
By adhering to these guidelines, agents can streamline their workflow while ensuring full compliance with FICA regulations. Failing to complete the verification before concluding a transaction could lead to regulatory penalties, making it essential to stay on top of these requirements.