Entities operating within the real estate sector will have new rules of identification, control and communication of any property rental, sale or exchange transaction.
Entities operating within the real estate sector will have new rules of identification, control and communication of any property rental, sale or exchange transaction. The reason for this is the new anti-fraud, money laundering and terrorist financing policy that will also cover this sector.
Among the various obligations, a strict identification of clients — regardless their being individuals, companies or even effective beneficiaries (singular or collective entities holding property indirectly) — must be done before entering any business deals. That identification will require data such as name, official residence, nationality, fiscal identity number (NIF), profession and employer. In regards to companies, they are responsible for presenting their official headquarters’ address or branch as well as the identification of all the shareholders owning more than 5% of the company.
Simultaneously, real estate agencies are obliged to keep a written record of that data for seven years and to define risk management and compliance policies to identify and to report suspicious operations of money-laundering and terrorist financing.
Despite considering this new policy a “fundamental step” to make the real estate sector more transparent and resilient to criminal activities, António Oliveira e Silva, a lawyer at Broseta, Roquete Morais and Guerra, warned that some entities are going to struggle to comply with all this set of requirements.
While stressing the importance of these initiatives, the lawyer said to Lusa that “reporting, collecting and treating data will make the day-to-day operations of these companies harder, especially the smallest ones”. Adding the need for training, Oliveira e Silva also mentioned that “There are some procedures that will be too heavy in terms of bureaucracy and will, therefore, be bringing extra costs to these companies”.
Oliveira e Silva stressed the importance of training when it comes to real estate agents, making them aware of “suspicious indicators”. Failing to comply with these rules will result in criminal charges leading to between 2 to 12 years of imprisonment or fines of thousands of euros. The lawyer also believes that in its stages, the implementation will cause “some perturbation” and that it could even lead the sector to a slow-down.
Any transaction equal to or over 15,000 euros will be requiring the abovementioned steps. Renting contracts over 2,500 euros per month will also be scrutinised. The real estate agencies are due to communicating any data regarding a transaction to the Institute for Public Markets, Construction and Real Estate (IMPIC). Any real estate agency with above 5 collaborators will be required to designate a Compliance Officer (Responsável pelo Cumprimento Normativo – RPN) to ensure the processes are in place.