REAL ESTATE AGENCY CODE OF CONDUCT

Presentation Overview

THE TERRORISM PREVENTION ACT

Introduction
  • Aims to prevent and punish Jamaicans for participation in terrorism both locally and internationally.
  • Terms used: terrorist activities and terrorist offences are defined and largely overlap.
Requirements of Dealers under the Act

  • Section 15: Reporting Requirements
      - Dealers must report quarterly to the Chief Technical Director of the Financial Investigations Division regarding possession of property owned by terrorist groups.
      - If in possession, dealers must report the details of persons, contracts, or accounts involved and the total value of the property.

  • Section 16: Additional Obligations
      - Dealers must pay special attention to:
        - Complex transactions due to inherent risks.
        - Unusually large transactions without clear economic or lawful purpose.
        - Unusual patterns of transactions.
      - All transactions suspected of involving property linked to terrorism must be reported to the designated authority within 15 days.

  • Penalties
      - Failure to comply with these requirements may result in:
        - Individuals facing fines up to $1,000,000 or imprisonment of up to 12 months.
        - Corporate entities facing fines up to $3,000,000.

The Proceeds of Crime Act (POCA)

Introduction
  • Enacted in 2007, the POCA updated the previous Money Laundering Act to address financial crimes effectively.
  • Aims for the investigation, identification, and recovery of the proceeds of crime.
Regulations Pertaining to Real Estate Business

  • Real estate activities are classified as regulated businesses under POCA.

  • Section 5(1): Prevention of Money Laundering
      - All regulated businesses must have policies and procedures to prevent and detect money laundering, such as:
        - Establishing employee integrity procedures and evaluating their financial history.
        - Continuous employee training on POCA.

  • Penalties for Violations
      - Businesses failing to implement necessary policies may face fines up to $400,000 JMD.

  • Business Relationship Protocol
      - No transactions should occur without proper identification procedures and record keeping.
      - No transactions via anonymous or fictitious accounts are allowed.

Due Diligence Requirements
  • Regulated businesses must ensure:
      - Clients provide satisfactory evidence of identity.
      - Periodic updates of client information, at least every five years.
      - Client information for transactions under $250 USD is not required unless suspicious.
Reporting Suspicious Transactions
  • Businesses must report suspicious transactions to the designated authority via the GoAML Platform, which will liaise for further actions.

The Real Estate Dealer's and Developer's Act (REDDA)

Overview of Parts & Regulations
Part 1: Preliminary Section
  • Covers the act's title, commencement, and definitions, as well as the professionals governed and exemptions.
Part 2: Real Estate Board Structure
  • Functions include issuing licenses, monitoring developers, and taking necessary protective actions for land transaction participants.
Part 3: Licensure and Registration of Dealers and Salesmen
  • Licensure Requirement
      - All individuals engaging in real estate must be licensed.
      - Unqualified Individuals
        - Specific criteria for disqualification and cancellations of licenses are provided (bankruptcy, wrongdoings, etc.).
  • Registrations
      - Dealers, salesmen, and their responsibilities elaborated.
Ethical and Operational Guidelines
Part 4: Development Schemes
  • Governs operations such as prepayment contracts, advertising, and trust account management.
  • Client Money Management
      - Client funds must be held in trust and cannot be used for personal business debts.
  • Compliance & Auditing
      - Audits of clients’ accounts are mandated, and specified procedures need to be followed to maintain compliance.
Part 5: Inspectorate Regulations
  • Powers of inspectors for enforcing compliance and demanding business practices information from dealers.
Code of Ethics Regulations (1998)
  • Specifies standards for office maintenance, professional conduct, and the handling of client transactions.
  • Deals with conflicts of interest, advertising, and continuous education.
      - Dealers must ensure fair practice and disclose potential conflicts transparently.
      - Must avoid discrimination and clarify relationships with clients in transactions.
Continuous Education
  • Registered dealers and salesmen are mandated to participate in professional development for license renewal.

Conclusion

Implications of Non-compliance

  • Detailed penalties outlined for both individual offenders and corporate bodies, emphasizing the seriousness of adhering to the regulations under both POCA and REDDA.

  • Ensures the ethical conduct of real estate professionals while aligning with national security interests.