Bradley Elliott | CEO | RelyComply | mail me |
Stringent enforcement of Anti-Money Laundering (AML) regulations places heavy responsibility on banks and other Financial Institutions (FIs). These institutions must take great care when onboarding customers. They must also track the source and destination of funds to ensure compliance. However, FIs do not operate in isolation.
During South Africa’s period on the greylist, other parts of the financial ecosystem faced increased scrutiny. This scrutiny intensified until the country’s removal from the greylist on 24 October 2025.
AML scrutiny beyond banks
This broader focus includes key players in property transactions. These players include legal practitioners, accountants and real estate agents. Here, the property sector’s role becomes central.
Each participant carries a legal duty under South Africa’s Financial Intelligence Centre Act (FICA). They must conduct AML checks before releasing funds and concluding property transactions. Even so, the property market continues to offer loopholes that money launderers can exploit.
While regulatory guardrails exist, criminals regularly find ways around them. Often, bad actors within the real estate sector assist these efforts. As a result, gaps emerge that weaken the property sector’s role as a frontline defence against financial crime.
When loopholes become liabilities
A recent example illustrates this risk clearly. Alleged criminal Nicole Johnson reportedly worked with property developers to disguise her finances. She used her construction businesses to mask the origin of funds. Despite her incarceration, she concluded a R5 million deal for a Sea Point apartment from her jail cell.
In this case, a developer allegedly enabled the transaction. Reports suggest that this developer was not registered with the Financial Intelligence Centre (FIC). A form of “soft law”, known as Public Compliance Communication (PCC) 56, applies in such situations.
PCC 56 requires property developers to register if they perform the actions of estate agents. However, developers can seemingly bypass this requirement. They do so by arguing that they are not “acting” as estate agents. This loophole weakens the property sector’s role in preventing abuse.
This situation reflects poorly on the property industry. Cases like this should not slip through the net. A culture of ignoring discrepancies has taken hold.
Estate agents as fincrime gatekeepers
Excessive trust in professionalism has also played a role. Together, these factors have resulted in a major scandal. Furthermore, this case reinforces the perception that real estate offers criminals an ideal vehicle. It allows them to hide assets and move money with limited detection.
Real estate often flies under the AML radar for several reasons. Yet this reality directly challenges the property sector’s role as a financial crime gatekeeper:
- Companies in the property transaction chain often treat compliance as red tape. They address it at the end of a deal rather than as a proactive responsibility.
- Estate agents, developers and conveyancers sometimes notice anomalies. These appear in client details, behaviour or payment patterns. However, many lack the systems or confidence to report suspicions.
- Many developers and estate agents also lack sufficient training. They do not always receive the support needed to manage regulatory processes properly.
Property sector’s AML compliance wake-up call
The property sector should treat South Africa’s removal from the FATF greylist as a turning point. Now is the time to confront weaknesses and reset expectations. As a first step, firms must stop viewing AML compliance as a box-ticking exercise. Instead, they should recognise the property sector’s role in building trust across the financial ecosystem. However, achieving this shift is not simple.
Verifying buyers takes time. Cross-checking intermediaries adds complexity. Clarifying beneficial ownership and identifying sources of funds requires expertise. In response, digital regulatory technology (RegTech) offers practical support.
RegTech solutions can streamline compliance processes. Modern tools provide workflows, automation and embedded regulatory knowledge. These capabilities help teams conduct effective frontline checks. They also strengthen the property sector’s role in identifying and escalating risk early.
Reworking the property market, together
Digital RegTech platforms support critical AML checks. They identify adverse media and watchlist appearances. They uncover beneficial ownership structures. They also track illicit funds and create clear audit trails for regulators. Through these tools, property institutions can flag suspicious transactions. They can submit reports to the FIC for investigation and potential prosecution.
When every institution accepts accountability, the system strengthens. Open dialogue and tracked data improve coordination. Under these conditions, money launderers struggle to evade scrutiny. With property crime under the spotlight, this moment matters. The sector can demonstrate how it will repair compliance culture and capability. Doing so will reinforce the property sector’s role in rebuilding confidence in South Africa’s AML landscape.
To learn more, see the latest Laundered podcast below:
