Do Rental Agents Need to FICA Tenants and Landlords? | DocFox

A question that we often get asked is whether or not rental agents need to FICA their rental clients. The answer is yes you do! 

As per the FIC Act, Estate Agents and Property Practitioners are Accountable Institutions and therefore are required to carry out all FICA requirements. Section 21 of the FIC Act prohibits Accountable Institutions from establishing a business relationship or entering into a single transaction with their clients unless they have established and verified the identities of their clients, or person(s) representing their clients.

This means that whether it is a once off sale, business relationship or a continued rent agreement, the agent should carry out FICA on both the landlord as well as the tenant before a business relationship is formed.

There is More to FICA than ID & Address Document Collection

To be fully FICA compliant you should perform the following on your tenants and landlord prior to entering into a business relationship:

• Collect the ID AND VERIFY the identity of the individual(s)
• Collect AND VERIFY documents that serve as proof of the individuals current residential address and verify that that address is correct  
• Use your RMCP to risk rate your client, this includes gathering information about the clients source of income, economic sector or occupation, obtaining information regarding the nature and purpose of your client’s relationship with you. (Here is where you could also request bank statements as proof of source of funds/wealth)
• Identify whether your client is on a sanctions list or has appeared in any adverse media
• Determine whether your client is a Domestic Politically Exposed Person (DPEP), a Foreign Politically Exposed Person (FPEP) or a Prominent Influential Person (PIP) - self declarations are not recommended here

As an important note,  Accountable Institutions are obligated to report any suspicious behaviour or transactions to the FIC. This includes reporting any cash transaction in excess of R49 999).

Performing this amount of due diligence on a potential tenant can only have a positive impact. Landlords and agents should be able to sleep better at night knowing that they have performed adequate checks to eliminate high risk tenants as much as possible.

Are you new to FICA and still not sure what it means to be fully FICA compliant? Read The 7 key requirements that need to be met in order to be FICA complaint.