From 2019 real estate agents have to comply with the Anti-Money Laundering and Countering Financing of Terrorism Act. This means more scrutiny placed on the money and people involved in house sales.
What is the new anti-money laundering legislation?
More than a billion dollars is laundered each year in New Zealand according to statistics. The Act is designed to try and prevent this laundering and identify those doing it.
The 2009 legislation was first applied to banks, financial service providers and casinos. Lawyers, accountants and real estate agents are now included. These sectors are classified as medium to high-risk.
Real estate agents will now have to assess behaviour and backgrounds and report anything suspicious. This could include people who “flip properties” – buy and sell very soon after, use lots of different legal firms, sell properties way undervalue or vendors and buyers working together.
What does the new anti-money laundering legislation mean for buyers and sellers?
Real estate agents will now have to verify the identity of their vendors (sellers of houses) whether they are individuals or working on behalf of a trust or company. This will include seeing identification documents such as passports.
Buyers don’t have to provide anything to the agent, but lawyers are also covered by the new legislation. This means your lawyer will need to verify your identity and the source of your funds for the deposit and purchase.
Lawyers and agents are just two of the professionals you need to help you during a house purchase
As well as making sure you have complied with anti-money laundering legislation during your house purchase you should also take steps to ensure the purchase goes smoothly, and that you are purchasing a sound property.
You should make sure you have finance in place for the deposit and the balance of the purchase. This will involve talking to your bank or financial or mortgage advisor to ensure you have access to funds.
You should check the land information memorandum (LIM) and title of the property. Your lawyer will do this for you. The LIM shows any work that has been carried out and consents. The title gives you information about the section and property including the current legal owner.
Finally, you should check the property is in good condition. To do this get a pre-purchase inspection. This will check the inside and outside of the property and alert you to any issues. If there are problems you can negotiate during the sale to get them rectified or the price reduced. Alternatively, you can decide to move on.
InnoHome carries out inspections across Auckland
We carry out pre-purchase house inspections across Auckland. We will provide you with a written report following the inspection. However, if needed a verbal report can be provided sooner.
Our inspections are thorough and carried out by an experienced inspector.
To arrange an inspection give us a call.