Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Property agents face daily fines for hiding home buyers
While real estate agents are required to establish the source of customer funds and report suspicious transactions, weaknesses in the system has dimmed compliance.
Property agencies face daily fines of Sh10,000 for failing to register with the anti-money laundering watchdog, the Financial Reporting Centre (FRC), in a crackdown on corrupt business people and other criminals hiding wealth in real estate.
The anti-money laundering watchdog has turned the heat on the property and land dealers after only 112 of the targeted 1,504 agents registered with it. All real estate agencies have been directed to register with the FRC by November 14 or risk penalties for non-compliance, which include Sh25 million fines for institutions and Sh5 million fines for individuals.
The Proceeds of Crime and Anti-Money Laundering Act, 2009 also prescribes daily fines of Sh10,000 for continued failures up to 180 days.
The FRC has launched a crackdown on anonymous home and land purchases to curb money laundering and terrorism financing.
Anti-corruption advocates reckon that criminals and corrupt officials and business people have for years anonymously hidden ill-gotten gains in real estate, with the sophisticated ones dodging the law to hide the proceeds of illicit activity by buying homes through legal entities or trusts.
While real estate agents are required to establish the source of customer funds and report suspicious transactions, weaknesses in the system has dimmed compliance.
“The centre hereby directs all unregistered real estate agencies in Kenya to register… in compliance to section 47A of the POCAMLA by or before Friday, November 14, 2025,” the FRC said in a notice on Tuesday.
“Take note that failure to register with the centre constitutes an offence pursuant to Section 47A (5) of POCAMLA and the centre will proceed to take necessary action.”
The FRC earlier unveiled a template for real estate professionals to report property deals above $15,000 (Sh1.94 million) and flag suspicious activity seen in cash real estate purchases.
The information required via the template includes full names, identity card number, current physical or residential address of those purchasing property, their occupation or employment details and source of income.
Real estate professionals, such as agents, will also be required to report the identities of the beneficial owners of companies buying real estate in cash to the FRC, which tracks illicit cash flow.
Real estate agencies are required to register with the FRC alongside other non-financial businesses and professions, including casinos, accountants, advocates and dealers in precious metals and stones.
Financial institutions, including banks, digital credit providers and online foreign exchange money managers, are also required to register with the FRC.
Compliance levels for other entities are much higher than those of real estate agencies, which reflects weak reporting by the property and land dealers.
The FRC classifies real estate agents involved in selling and mortgaging, charging, letting or managing of immovable properties such as houses, shops or any other building.
The watchdog is alarmed that many unregistered individuals and firms are practising as real estate agents in breach of the law, opening a loophole that the agency says eases the flow of illicit funds through Kenya’s real estate markets.
The FRC has directed that the initial payment for a property deal must be wired through an account in their name in a financial institution that has obligations to flag suspicious ones.
“If you are unable to perform customer due diligence measures, you must...refuse to establish the business relationship or conduct the transaction,” says the FRC in the template.
All real estate agents will have to set up an internal anti-money laundering system and appoint a money laundering reporting officer (MLRO) to ensure compliance.
The agents will be required to keep the records related to property being sold, the seller and the beneficial owner of any legal entity receiving the property for at least seven years. The agents must report deals above Sh1.94 million to the FRC every Friday.
Politically exposed persons (PEPs) or people from countries ranking higher in corruption and money laundering and terrorism financing risks will be subject to enhanced due diligence measures.
This will include deeper checks on their identity, source of funds, and transaction purpose to guard against corruption-related money laundering.
Agents will be expected to monitor unusual transaction patterns, large cash deals, or transactions inconsistent with the customer’s profile. The FRC has issued the real estate sector-specific checklist of red flags that can help agents identify illicit cash.
It wants real estate agents to look out for customers who do not show particular interest in the characteristics of the property, including location, cost and when it will be handed over to them or do not seem particularly interested in bargaining for the price or payment terms.
In addition, the agents have been asked to be cautious of clients who show a strong interest in completing the transaction quickly, even without inspecting the property as well as those who do not want to put their names on any document that would connect them with the property or use different names for purchase, closing documents and deposit receipts.
Also to be on real estate’s radar will be clients buying back a property they recently sold or those known to have paid large remodelling or home improvement invoices with cash.
