For real estate
Real estate delayed CDD and uncooperative counterparties
A real-estate broker can owe CDD duties to a buyer or seller who never appointed the agency. The Rules recognise the practical difficulty by allowing defined delay and, in a narrower non-cooperation case, deemed compliance. Neither is automatic. Delayed CDD requires an eligible counterparty, low additional risk, ordinary-course necessity, completion as soon as reasonably practicable and adherence to the property deadline. Deemed compliance requires all reasonable steps, detailed records and consideration of the failure to cooperate in the suspicious-matter process. Refusal is not proof of laundering and does not automatically require an SMR, but it cannot be ignored. This guide turns the legal conditions into a respectful, evidence-based workflow for agencies.
See the real estate AML/CTF workspaceStep-by-step process
Identify the counterparty route
Record the represented customer, the counterparty, each service start point and the rule that permits delayed CDD.
Approve and date the delay
Evidence ordinary-course necessity, low additional risk and the earlier of the two statutory property deadlines.
Request information clearly
Explain the legal purpose, required information, secure channels, privacy handling and deadline without suggesting the agency represents the counterparty.
Record all reasonable steps
Preserve every contact, response, alternative offered, difficulty and item still missing, then escalate under the program.
Consider suspicion and final treatment
Assess non-cooperation with all other facts, document any deemed-compliance basis and make an SMR decision without tipping off.
Confirm that the delayed route applies to the counterparty
For table 5 brokering, both parties are customers, but the represented party and counterparty enter the relationship differently. The Rules can permit the agent to begin serving its represented party and delay specified initial CDD for the counterparty when the transaction reaches the relevant stage. Record which side appointed the agent, when that service began, when the other party became a customer and the precise rule relied on.
The general safeguards still apply. Delay must be essential to avoid interrupting the ordinary course of business, create low additional risk and be managed under the agency's program. Do not use delayed CDD because a request was forgotten, the team wants to avoid an awkward conversation or the transaction is commercially important. Assess known risk before approving delay.
Calculate and monitor the property deadline
For the relevant property route, the specified period ends at the earlier of 28 days after contracts are exchanged and three days before the settlement date initially agreed by the parties. Calculate both dates using reliable transaction records. A later extension should not be treated as moving the initially agreed settlement limb. The requirement to finish as soon as reasonably practicable may produce an earlier operational deadline.
Use automated reminders and a stop status before the outer date. The file should identify outstanding matters, request history, risk changes and an owner. If new information increases risk, reconsider whether delayed CDD remains available. Do not let a calendar alert replace active follow-up or judgement.
Take all reasonable steps respectfully
Give the counterparty a clear explanation that the request arises from the agent's statutory role in the transaction and does not mean the agent represents them. State the information needed, secure collection options, privacy handling, deadline and a contact for questions. Use proportionate follow-ups and, where appropriate, coordinate with the person's own agent or conveyancer under a lawful information-sharing arrangement.
Reasonableness depends on the transaction and risk, not a fixed email count. Record dates, channels, recipients, responses, technical problems, alternative methods offered, information obtained and unresolved items. Escalate language or accessibility needs and do not characterise a person as suspicious merely because they question an unfamiliar request.
Apply deemed compliance only when every condition is met
The Rules can deem a table 5 broker compliant with specified counterparty CDD duties where the counterparty fails to cooperate, but only if the reporting entity has taken all reasonable steps and satisfies the record and consideration requirements. Preserve the efforts made and difficulties encountered. A bare note saying buyer refused KYC is not enough.
The agency must also consider the failure to cooperate in accordance with the suspicious-matter provisions. That means assessing it with all other available facts and recording the outcome. It does not turn refusal into an automatic SMR, nor does deemed CDD compliance prevent reporting where reasonable grounds for suspicion exist. Obtain specialist review when relying on the deeming rule.
Protect reporting and communication decisions
If the combined facts form a suspicion on reasonable grounds, submit an SMR within the applicable deadline and protect against tipping off. Client and counterparty communications should use approved language about legal information requirements, risk review or inability to proceed and should not disclose that a report is being considered or has been made.
Retain the customer start point, risk assessment, delayed approval, both calculated dates, requests, responses, difficulties, legal basis for deeming, SMR consideration and final approval. Review the file after completion so recurring friction can improve scripts, accessible channels and training without weakening the statutory tests.
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
Can an agent automatically delay CDD on the unrepresented party?
No. The transaction and customer must be eligible, and ordinary-course necessity, low additional risk, prompt completion and program conditions must be satisfied. Document the decision when the delay begins and reassess if risk or transaction facts change.
Does refusal to provide identity documents automatically require an SMR?
No. The Rules require the failure to cooperate to be considered, but suspicion must be assessed from all available facts. Record the inquiries, explanations, risk factors and decision. Report promptly if reasonable grounds for suspicion are formed, without waiting for proof.
How many contact attempts count as all reasonable steps?
There is no universally safe number. Reasonableness depends on timing, available channels, transaction risk, accessibility and responses. Use clear requests, proportionate follow-ups and practical alternatives, then record the complete effort and obstacles for review.
Does deemed compliance remove all AML/CTF risk on the file?
No. It addresses specified CDD compliance when its conditions are met. Ongoing risk assessment, suspicious-matter consideration, sanctions controls and other obligations remain. It also does not excuse missing CDD for the represented customer.
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.