It’s official: real estate agencies are heading into a new compliance phase. Effective from 1 April 2026, Directive 11 by the Financial Intelligence Centre (FIC) will require estate agencies to submit a detailed Risk and Compliance Return (RCR) to the FIC, covering their anti-money laundering (AML), counter-terrorist financing (CTF), and broader risk management controls.
On the surface, it appears that the sector is already well prepared for increased scrutiny. A recent Prop Data poll found that 77.2% of property practitioners said they were “very confident to extremely confident” in their FICA compliance processes. But experts say there can still be a gap between confidence and how compliance is applied in practice.
Where FICA compliance can start to break down
Even the strongest compliance processes have limitations in practice. According to Basie Botha, Principal at Basie Botha Properties in Mbombela (Nelspruit), the high level of confidence comes from the effort agencies have put into building robust compliance processes, rather than a guarantee that every risk will be detected.
“The confidence often reflects effort, training, and documented procedures rather than actual outcomes,” he says. “In reality, property practitioners rely heavily on information disclosed by clients. FICA requires reasonable steps, not absolute certainty, and practitioners can only act on what is made available to them.
“Without shared accountability across buyers, sellers, banks, and regulators, strong internal compliance does not guarantee risk elimination. Effective FICA implementation depends on all accountable and reporting institutions fulfilling their respective duties under the Act.”
Trish Parsons, Owner of Living Atlantic and Operations Manager for The Camps Bay Guy, agrees that confidence alone is not enough if accountability is lacking at a practical level.
“There isn’t enough accountability at a grassroots level yet, and there’s still a lot to be done,” she acknowledges. “In conversations with practitioners across different agencies, I often see an attitude of ‘it won’t happen to me’, which undermines the seriousness of compliance. Confidence in policies is one thing, but without genuine accountability and consistent application on the ground, it does not reflect reality.”
Preparing for high-risk real estate clients
With 89% of practitioners in the Prop Data poll saying their business has a clear process for identifying high-risk clients, the challenge is less about having procedures on paper. Instead, it’s more about how consistently they are applied in practice. Experts say effective risk management starts early and remains embedded throughout the transaction.
“An effective FICA process is risk-based, practical, and consistently applied, as required by section 42,” says Botha. “It includes early client risk profiling, ongoing due diligence under section 21A, escalation procedures for red flags, and enhanced measures for higher-risk transactions or clients.
“Crucially, practitioners must have genuine authority to pause or terminate transactions where risk cannot be mitigated. Smaller agencies are often targeted by high-profile clients who assume pressure can be applied, but integrity and adherence to a Risk Management and Compliance Programme (RMCP) protect both the practitioner and the industry.”
Parsons emphasises that the process should begin as soon as a client relationship is established, rather than once an offer is ready to move forward. “Sellers must be FICA’d at the mandate stage, which is why obtaining and documenting mandates, even open ones, is so important,” she says.
“By the same token, a signed offer to purchase should not be submitted to the conveyancer until the compliance officer has received the FICA documents, placing the responsibility back on the purchaser. This ensures that compliance is embedded at every stage, not treated as an afterthought.”
For Jana Smith, Principal of Harcourts Hermanus, the process also depends heavily on the judgment and experience of the practitioner.
“During the viewing process, the sales staff builds a relationship of trust with their clients and by asking the right questions, one achieves honest answers,” she says. “If a practitioner reports a suspicious source of funds to me as the business owner, I might follow up with a phone call to the client and decide from there whether I shall report the matter to FIC or not. I have reported many suspicious clients in the past and have no problem doing that. One simply has to make sure that one does not report an innocent person.”
How the real estate industry can tighten up FICA processes
Improving FICA compliance comes down to doing the basics more consistently, checking information earlier, and sharing responsibility across the whole transaction. The goal is to spot risks sooner, rather than dealing with them after the fact.
“Be vigilant and aware,” says Smith. “If a red flag gets raised during dealings with a client, it needs to be reported to the FICA officer in the office. There is no harm in reporting when one becomes suspicious (without going overboard), rather than not reporting and facing the consequences.”
Looking beyond individual decisions, Botha says improving FICA compliance and reducing future risk begins earlier in the transaction process, particularly on the buyer side.
“Improvement must begin earlier in the transaction lifecycle, particularly with buyers. Purchases should not proceed without bank pre-qualification and verified proof of funds. Banks, as accountable institutions under Schedule 1, are best placed to validate the source of funds through their own extensive FICA obligations.
“Property practitioners already collect and record the information required under sections 21 and 22, but they are not trained investigators. Meaningful improvement requires enforcement against unregistered practitioners and non-compliant buyers, not only licensed practitioners. Technology can assist, but real progress depends on recognising FICA as a shared responsibility across the entire property transaction chain.”
Parsons, meanwhile, says that even where systems exist, the effectiveness of FICA compliance ultimately depends on how seriously it is taken within agency culture.
“Agencies need to build accountability at a grassroots level,” she encourages. “Too often, there is an attitude of ‘it won’t happen to me’ among practitioners, which undermines compliance. Improvement starts with regular training, clear escalation procedures, and leadership that insists FICA is non-negotiable. Technology can help automate checks, but culture is key. Principals and management must set the tone that compliance is as important as and part of closing deals.”