FICA and Your Property Purchase: What Every Buyer Should Know

If you are buying a home or an investment property, the word FICA will come up very early in the process. It is not a formality. Under the Financial Intelligence Centre Act 38 of 2001, law firms that do conveyancing are accountable institutions. That means before we can act for you, and before a property can be transferred into your name, we must establish who you are and where your money comes from. A matter cannot even be opened without proper FICA verification, and a transfer will never be registered at the Deeds Office without it.

So what does FICA actually require of you as a buyer?

First, proof of identity. You will need a certified copy of your ID document (or your passport, if you are a foreign buyer) together with proof of your residential address, usually a municipal account or a bank statement not older than three months.

Second, proof of your source of funds. This is the part buyers most often overlook, and it is the part that causes the most delays. How you prove your funds depends on where they come from. If you are paying from savings, three to six months of bank statements and your latest payslip or IRP5 usually settle it. If the money comes from the sale of another property, we need the sale agreement and confirmation that that transfer was registered. If a family member is lending you money or gifting it to you, we need a signed loan agreement or a donation declaration, and the lender or donor must also be FICA verified. If you inherited the funds, we need the reference from the Master of the High Court and the executor’s distribution account.

Companies, Close Corporations and Trusts

If the buyer is a company, a close corporation or a trust, the picture is wider. Following the 2023 amendments to the Companies Act, the Trust Property Control Act and FICA itself, beneficial ownership must be transparent. Companies and close corporations must file a beneficial ownership return at CIPC identifying the natural persons who hold a 5% or greater interest or who exercise control. Trusts must keep a beneficial ownership register with the Master of the High Court, listing the founder, the trustees and the beneficiaries. Your conveyancer is obliged to be satisfied with that picture before acting, and an outdated filing is not an answer.

Enhanced Due Diligence

Some transactions attract enhanced due diligence and simply take longer. Cash buyers, buyers whose funds come from offshore, and politically exposed persons can expect more questions. That is not a reflection on them; the law requires a higher standard of verification for those transactions, and a legitimate transfer will still go through, just with a little more patience.

Practical Advice for Buyers

The single most common reason a transfer stalls in its first weeks is incomplete FICA documentation. Have your documents ready before you sign the offer to purchase, not after. Check that your ID and proof of address are current, and be upfront from the start about how the money is being raised. If any document is missing, tell your conveyancer immediately so that it can be obtained while the rest of the matter proceeds.

How We Can Help

FICA exists to protect the property market from money laundering and fraud, and in practice it protects you as well. It confirms that the person selling to you is really the owner, and it guards against the payment fraud that has become so common in property transactions. At OM Baloyi Inc we guide buyers and sellers through every step, from FICA and guarantees to lodgement at the Deeds Office. Contact us if you are buying or selling, and let us keep your transfer on track.