By now property purchasers will be aware of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, generally known as 'AML'. Since 1 July 2018, this legislation has imposed obligations on most of the professionals you deal with when you're buying property. AML affects your bank, accountant, lawyers and conveyancers. Since 1 January 2019, real estate agents must comply with this legislation.

What is AML about? AML is the government's response to international pressure to help combat money laundering and the financing of terrorist organisations. All your professional agents must now have evidence of your identity. 

Evidence: If you are buying a property in your individual capacity, we must have a copy of your passport or driver licence, as well as a copy of a bank statement, rates notice or utility bill that proves you live where you say you do. Depending on the circumstances, we may ask about the source of your funds for purchase (see below).

If you are purchasing on behalf of a company, we need the above documents (ID and address verification) for each director and each shareholder, and your company address.

If you are buying for a trust, we need the above information for the settlors, the appointers, each trustee and any named beneficiary, and your trust address.

For both trusts and companies, we must know the funding source for the purchase and where the funds are currently held. 

Source of funds for the purchase: If you are using funds from a previous property you have sold to fund this purchase, we may have to ask to see your sale agreement. If you are using an investment or savings from working, we may ask for a bank statement, your employment agreement or to see a set of financial statements. If you have received a monetary gift or an inheritance, we may ask to see the deed of gift or the deceased's will. 

Why should we comply? Under AML, if you don't provide us with the above information, or we believe that your transaction is suspicious for other reasons, we must file a report with the Commissioner of Police. If we don't do this, we could be fined up to $5,000,000 and/or be sent to jail.

Complying with AML has added a huge layer of compliance to any property purchase. Irritating as it can be, particularly if you have been a client of ours for years, we must obey the law. If you would like to talk more with us on AML, don't hesitate to ask us.

 

DISCLAIMER: All the information published in Property Speaking, No 31 Spring 2019 is true and accurate to the best of the authors' knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Property Speaking, No 31 Spring 2019 may be reproduced with prior approval from the editor and credit given to the source.  Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: adrienne@adroite.co.nz. Ph: 029 286 3650 or 04 496 5513.