Law change means more questions
NEW LAUNDERING laws mean real estate agents may ask you a list of questions the next time you buy or sell a house.
They have to do this because of law changes designed to stamp out money laundering and financing terrorism in New Zealand.
The new rules came into effect on January 1 and require the real estate industry to prove the identities of the people with which it works.
An estimated $1.35 billion is laundered annually in New Zealand, with criminals using different methods to ‘‘wash’’ the money they make from crime to elude detection.
One way to make stolen money look like it’s from a legitimate source is to buy or sell property or use financial services.
This has been a popular option with criminals, despite the part bankers, lawyers and real estate agents play in protecting the integrity of property transactions.
The new rules of the Anti-Money Laundering and Countering Financing of Terrorism Act put more onus on agents to establish a buyer’s or seller’s identity.
They apply to any agent representing a client who’s selling or buying real estate and who accepts a deposit in cash of $10,000 or more from someone who’s buying real estate.
The Justice Department hopes this will help real estate agents to detect ‘red flags’ that might not be picked up by banks or other financial service providers who interact with the same customers.
That’s because they may have more information about the people or funds involved in a particular transaction.
For instance, they must confirm a person’s identity, including their date of birth and address details, before an agency agreement is signed.
This must be done even if they have known the person for a long time or have used the agency previously.
The information asked for will vary, depending on whether you’re selling the property as an individual or as part of a partnership, company, estate or trust.
If you’re selling as an individual, you’ll need to provide photo ID and be ready to answer any other questions the agency may have.
If you’re selling a family trust property, you’ll need to provide this kind of verified identification for all the members of the trust and its beneficiaries.
Ideally, these requirements won’t slow down the process. But it’s sensible to prepare as much documentation as you can, so ask your agent what they’d like you to bring along.
For more information on buying or selling property in New Zealand, visit settled.govt.nz.