For real estate
Why real estate agents must treat buyer and seller as customers
For Australian real-estate brokering under table 5 item 1, the AML/CTF customer definition deliberately differs from the agency relationship. Both the seller or transferor and buyer or transferee are customers of the broker's designated service, even when only one side appointed and pays the agent. That does not create a new fiduciary retainer with the counterparty or erase agency and conflict duties; it creates a statutory CDD obligation. The two services can start at different times, so the CDD workflow must distinguish the represented party from the counterparty and capture the transaction milestone that brings the second customer into scope. This guide explains the model and prevents the outdated single-client approach from being embedded in forms or staff scripts.
See the real estate AML/CTF workspaceStart with the table 5 customer definition
Table 5 item 1 covers brokering the sale, purchase or transfer of real estate in the course of business. The Act identifies both sides as customers: the seller or transferor and the buyer or transferee. The rule can apply even where there is no consideration. A seller's agent therefore cannot stop at CDD on the vendor, and a buyer's agent cannot stop at CDD on the purchaser once the counterparty service has begun.
Keep statutory customer status distinct from who receives advice, who owes commission and whose interests the agent represents. Use clear wording with the unrepresented party: information is requested to meet the agent's legal obligations in the transaction, not because the agent acts for that person. Staff should avoid language that suggests a conflict, new agency or legal advice relationship.
Identify when each customer relationship begins
For a seller's agent, the service to the seller generally starts when the agency or brokerage agreement is entered. The buyer-side service starts when a sale or transfer is reasonably expected, commonly when an offer is accepted or a contract is signed depending on the facts. The broker should not collect intrusive buyer information from every casual inspection attendee merely because they viewed a property.
For a buyer's agent, the service to the buyer can start when the engagement to find or acquire property begins. The service relating to the seller arises later when a particular transaction is reasonably expected. Record the date, event and evidence for each side. CDD timing, risk assessment and any delayed process should be linked to that individual start point rather than one generic file-opening date.
Apply customer-type CDD to both sides
For an individual, establish and verify the required identity matters using reliable and independent documents or data and apply the risk controls in the program. For a company, trust, partnership or association, establish the entity, representative and authority, person on whose behalf it acts, beneficial owners and relevant control. Apply PEP and targeted-financial-sanctions checks and understand the nature and purpose of the relationship as required.
The two parties need not present identical risk. A local individual vendor and an offshore layered entity buyer require different evidence and enhanced measures. Assess each customer and the transaction together, while avoiding discriminatory assumptions. Record discrepancies such as a payer unrelated to the purchaser, an undisclosed beneficial owner or instructions apparently controlled by a third party and resolve them through the program.
Use delayed CDD only for the defined counterparty case
The Rules recognise that an agent may already be acting for its represented party before the other side becomes identifiable or cooperative. A property-specific delayed route may apply to the counterparty when all eligibility, ordinary-course, low-additional-risk, timing and program conditions are satisfied. It is not authority to defer the represented customer's CDD or to wait automatically until settlement.
The property period ends at the earlier of 28 days after exchange and three days before the initially agreed settlement date, but CDD must be completed as soon as reasonably practicable. If the counterparty does not cooperate, separate deemed-compliance provisions may be available only after all reasonable steps, prescribed records and consideration of the behaviour under the suspicious-matter framework. Follow the current Rules exactly.
Control third-party collection and duplicated requests
A broker can design a courteous process with conveyancers, buyer's agents, seller's agents or verification providers, but information sharing needs authority, privacy controls and a lawful AML/CTF basis. Outsourcing collection does not transfer liability. Statutory reliance or structured property arrangements apply only when their conditions are met and documented.
Tell each party what information is required, why, how it will be handled and the deadline, without making misleading claims that every document is mandated in every case. Keep the evidence or lawful access to it, verification outcome, risk decision and exceptions. A record saying the other agent did KYC is not enough to demonstrate compliance.
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
Is the buyer a customer of a seller's real estate agent?
Yes, for table 5 item 1 AML/CTF purposes the buyer or transferee and seller or transferor are both customers. That statutory status does not mean the seller's agent represents or advises the buyer. Explain the limited compliance reason for the request clearly.
Must agents verify everyone who attends an open home?
Not merely because they inspect a property. The counterparty service starts when a sale or transfer is reasonably expected on the facts. The agency should record the trigger it uses, such as an accepted offer or other sufficiently concrete transaction milestone, under its program.
Can the conveyancer's identity check replace the agent's CDD?
Only where a lawful reliance, structured arrangement or other mechanism applies and all its conditions are met. Outsourcing or receiving a copy does not by itself transfer responsibility. The agent should document its basis, access to evidence, review and treatment of discrepancies.
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.