The Importance of KYC in Real Estate

The acronym KYC means Know Your Customer. As the name suggests, it is about getting to know the person you are doing business with. In the world today knowing your customer can determine the success or failure of your business as future transactions can result from taking the time out to know your client or customer. Real Estate is quite a lucrative business and losses suffered can be detrimental.  Making sure your business is KYC compliant and the PROCEEDS OF CRIME ACT requires a few documents which can protect both client and agent and brokerage once.

Here are some of the documents involved in getting to know your customers:

For individuals

  • Identification can be in the form of a valid Passport, Driver’s License or National ID. A US Driver’s license can also be used as proof of address. ID provides key information such as signature, date of birth, address and expiration date as well as a photo of the client to validate the person with which a transaction is being done or contemplated.
  • Proof of Address– This can be a bank or credit card statement, utility bill, letter from a justice of the peace. Knowing where your customer is located is imperative as you may need to get documents signed or delivered as well as how to find a client in case of an emergency.
  • Tax Registration Number or TRN/ Social Security Number– This is important as every citizen paying their taxes or conducting legitimate business should have a Tax Registration Number or Social Security Number and this helps the government in the collection of their taxes. Paying your taxes is a matter of legality and is mandatory when doing business in Jamaica.
  • Customer Information Form/CIF – is a form that asks for basic information about the client/customer. So, let’s imagine a client calls an agent saying “Hey I’d like to purchase a property can you assist me? The agent will need to get some information from the client that cannot be found on ID or TRN such as is this client employed or is he/she self-employed. Is he or she married? The CIF form will assist with answering these questions. Information such as name, address, employer, ID details etc. this allows the agent to confirm the information on the form versus the particulars presented. Some of the information found on this form is not found on the other document presented but is vital to getting to know the customer.

For Companies

For Companies or Corporate clients, the documentation required differs in that in addition to documents related to the Directors’ documents related to the identity of the company must also be presented. These documents include:

  • Certificate of Registration is a government issued document for businesses, this document includes the name of the company, Company’s Tax Registration Number and National Insurance number, also for trading as it will show the name of the owner. This document basically acts as an ID for Company and validates that this is a legitimate business. The older Certificate will not have the TRN and NIS number in those cases the TRN must be presented as just as individuals the government uses the TRN in the collection of taxes.
  • Form 23 or Certificate of Incorporation – So, we received the company’s Certificate of Registration and we know its legitimate how do we know the individual speaking to us can legally transact business for the company? Which brings us to another major document known as Form 23 or Certificate of Incorporation which lets us know who the owners of the business are and who can sign and transact business legally on behalf of the company. This document is also issued by the government and is legally binding. In addition, to getting the names of the directors we also need to identify them as such a government issued identification must be presented by the directors.
  • Proof of Address – is also needed for companies to verify their location and legitimacy when operating business; this can be in the form of utility bill if company is new a letter for request of these services.
  • Company Customer Information Form (CIF) – Last but certainly not least is the Company Customer Information Form which is to be completed for the company and this will give a detailed overview of the company.  

So the next time your Agent ask you for these documents, understand that the basis of this information is not that they are intent on being ‘nosy’ or intrusive, instead, based on the requirements of the Proceeds of Crime Act that this information be presented prior to entering into any form of transaction with the Brokerage.

Article Written by:

Nekeisha Harris

Database Coordinator

CENTURY 21 Heave-Ho Properties