What is captured in a real estate agency?
Property management and leasing are not, on their own, designated services. The capture point is the sale or purchase transaction. Both sides of the deal need due diligence: your vendor, and where you act for them, your purchaser.
- Acting for a vendor in the sale of real estate
- Acting for a purchaser (including buyer's agency work)
- Property development sales where the developer sells directly
Customer due diligence on a property file
Verification has to move to the front of the sales process. AUSTRAC's real-estate guidance treats both sides as customers of the brokering reporting entity. Where delayed initial CDD is available for the unrepresented counterparty, complete it no later than 28 days after exchange or three days before the agreed settlement date, whichever comes first, and record the steps taken if the counterparty is uncooperative.
- Treat both the seller or transferor and the buyer or transferee as customers of the brokering reporting entity
- Complete CDD on the represented party before providing the service and apply the specific delayed-CDD rules to an eligible unrepresented counterparty
- For company or trust sellers, identify and verify the beneficial owners behind the structure
- Screen parties against sanctions lists, PEP registers and adverse media
- Record a risk rating for the relationship — higher scrutiny for offshore parties, complex structures, cash-heavy settlement plans or unusual urgency
- Keep the evidence for seven years
Red flags AUSTRAC expects agents to notice
- A buyer or seller who will not meet, or who deals only through unexplained intermediaries
- Purchase funds arriving from third parties or offshore accounts with no logical connection to the buyer
- Requests to over- or under-state the price in the contract
- Rapid resale or flipping patterns involving the same parties
- Cash-heavy deposit or settlement arrangements
- Company or trust sellers where nobody can explain who really owns the property
Reporting and the criminal offence most agencies have never heard of
Where you suspect a transaction or party is connected to crime, you must report to AUSTRAC — generally within three business days of forming the suspicion. Section 123 prohibits disclosing protected SMR-related information where that would or could reasonably be expected to prejudice an investigation and carries up to two years' imprisonment. Train your team to raise concerns to the compliance officer privately and use documented, genuine customer communications that do not reveal the suspicion or report.
Setting the agency up
- Enrol with AUSTRAC (the 29 July 2026 deadline has passed for existing agencies — enrol now if you have not)
- Appoint and notify your AML/CTF compliance officer
- Write a risk assessment and AML/CTF program for the agency; use an AUSTRAC starter kit only if every suitability condition is met, and customise it to actual services and risks
- Build verification into your listing and buyer-engagement workflow
- Train every agent on red flags and the escalation path, and keep the training records
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
Does a real estate agency have to verify both buyer and seller?
Yes, for the brokering designated service AUSTRAC treats both the seller or transferor and buyer or transferee as customers. Complete CDD on the represented party before providing the service. The unrepresented counterparty may qualify for delayed CDD, subject to the prescribed deadline and documented attempts to obtain the information.
Is property management caught by Tranche 2?
Routine leasing and property management are not designated services on their own. An agency becomes a reporting entity when it provides a designated service, including relevant sale or purchase brokering. Assess the actual services rather than assuming status from the agency's business label.
What happens if a buyer refuses identity verification?
Follow the counterparty and delayed-CDD rules that apply to the transaction, record each reasonable step taken and escalate the refusal under your risk and suspicious-matter process. If required CDD cannot be completed by the applicable deadline, follow the program's restriction, continuation and reporting decision controls rather than improvising at settlement.
How long must real estate AML records be kept?
Seven years. This covers identity verification evidence, screening outcomes, risk decisions, and any reports made to AUSTRAC, and the records must be retrievable if AUSTRAC asks.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser. See our editorial and correction standards.