Anti-money laundering checks for estate agents: what to check on the vendor and the buyer, and when

Check 1: identify

For an individual: full name, date of birth and residential address. For a company: name, ACN or ABN, registered office and principal place of business, directors. For a trust or SMSF: the trust's name, the trustee, the beneficiaries or class of beneficiaries and the settlor where relevant. Collect it from the client and from the documents, not from memory.

Check 2: verify

Compare what the client told you with a reliable and independent source: a current driver licence or passport sighted in person or as a certified copy; an electronic verification service that checks the details against government and credit data; for companies, the ASIC register; for trusts, the deed. Record which document you saw, its number, who verified it and when. Verification of identity for electronic conveyancing covers some of this ground but is a separate requirement; most agencies do both in one sitting.

Check 3: beneficial owners

For any company, trust or partnership, identify the individuals who ultimately own or control it (ownership of 25% or more, or effective control) and take reasonable steps to verify them. An ASIC extract gives directors and shareholders; a trust deed gives trustees and beneficiaries; layered structures need a short diagram and the client's explanation. If the client will not say who is behind the entity, that is a red flag in itself.

Check 4: purpose and source of funds

Record the purpose of the transaction in a line (sale of the family home; purchase of an investment property). Ask about the source of the deposit and the purchase funds in proportion to the risk: for most buyers, a sentence; for a high-risk buyer, documents such as a bank statement, a loan approval or a settlement statement from a prior sale.

Check 5: politically exposed persons

Ask whether the client or an immediate family member or close associate holds or has held a prominent public position, in Australia or overseas, and screen the name against a PEP list if your tools allow. Foreign PEPs are high risk by default; domestic PEPs when other factors are present.

Check 6: risk rating

Combine client type, country, value, delivery channel and red flags into a rating of low, medium or high, using the same weights for every client. The rating sets the due diligence and the review date: commonly 24, 12 and 6 months. Our client risk assessment guide explains the scoring and has an estimator.

Timing for each party

• Vendor (or the buyer you act for): at the agency agreement, before you provide the service.
• The other party: when the transaction is reasonably expected to proceed, completed as soon as practicable and no later than 28 days after exchange of contracts or 3 days before settlement, whichever comes first.
• Pre-commencement clients (relationship before 1 July 2026): on a trigger, or at the next campaign in practice.

When a client will not cooperate

Record the steps you took and the client's response. Ordinarily you must not provide the designated service to a client whose initial due diligence is incomplete, and for the other party you must stop before the delayed-verification deadline passes. Escalate to the compliance officer: refusal to identify, or documents that look wrong, are grounds to consider a suspicious matter report.

What a complete file looks like

Kept for seven years after the relationship ends, with each change timestamped. RealtyAML records each check against the vendor or buyer, diarises the buyer's deadline and produces this file on demand.

• Identification details for each party, with the document type and number.
• The verification evidence or the electronic verification reference, who verified and when.
• Beneficial ownership findings for any entity.
• Purpose, source-of-funds note where taken, PEP answer.
• Risk rating, the factors behind it and the next review date.
• Any suspicious matter or threshold transaction report and its receipt.