Real estate AML/CTF documentation: Onboarding checklists and recordkeeping examples
Real estate professionals affected by Tranche 2 typically document customer identification, transaction records and risk assessments. This article provides examples of what many agencies include in their documentation workflows.
Onboarding documentation overview
When onboarding new clients for property transactions, real estate agencies commonly document several categories of information. The specific items depend on your designated services and risk assessment.
Example: Vendor onboarding checklist
Items many agencies document when listing a property for sale:
Copy of identification documents (driver's licence, passport) or electronic verification record
Title search or rates notice confirming registered proprietor
Company extract, trust deed, or beneficial ownership declaration
Power of attorney or authority to act (if vendor is not attending in person)
Brief record of any risk factors identified and how they were addressed
Example: Purchaser onboarding checklist
Items many agencies document when a purchaser makes an offer:
Verification of all parties named on the contract
Notes on how the deposit will be paid (bank transfer, personal cheque, etc.)
For company or trust purchasers, identification of individuals with 25%+ ownership
Owner-occupier, investment, development, etc.
Recordkeeping overview
The AML/CTF Act generally requires records to be kept for 7 years. Many real estate agencies organise their recordkeeping around the following categories:
Categories of records
- Customer identification records: Copies or references to identification documents, electronic verification results
- Transaction records: Contracts, deposit receipts, settlement statements
- Risk assessment documentation: Notes on risk factors identified, enhanced due diligence applied
- Correspondence: Relevant emails or file notes relating to AML/CTF matters
- Training records: Evidence of staff training completion
Storage considerations
Many agencies store AML/CTF records within their existing property management or CRM systems, organised by property address or client name. Some considerations include:
- Secure storage with appropriate access controls
- Ability to retrieve records within a reasonable timeframe if requested by AUSTRAC
- Backup and disaster recovery procedures
- Clear retention schedules (typically 7 years from end of relationship)
Illustrative scenarios
The following hypothetical scenarios illustrate how documentation considerations might arise in practice. These are examples only and do not constitute advice on how to handle specific situations.
Scenario 1: Individual vendor, straightforward sale
A homeowner lists their property for sale. They attend the agency office in person and provide a driver's licence for identification.
Typical documentation: Copy of licence, title search confirming ownership, agency agreement, file note confirming low-risk assessment based on straightforward circumstances.
Scenario 2: Company purchaser with overseas directors
A company wants to purchase a commercial property. The company has two directors, one based in Australia and one overseas.
Considerations: This scenario may involve additional documentation including ASIC company extract, identification of both directors, consideration of jurisdictional risk factors and enhanced due diligence procedures depending on the agency's risk assessment.
Scenario 3: Quick resale without obvious improvements
A vendor lists a property they purchased only 6 months ago at a significantly higher price, with no apparent renovations or improvements.
Considerations: This scenario may warrant additional documentation about the circumstances, as rapid resales can be indicators that warrant closer attention. Questions to discuss with your adviser include how to document such situations and when escalation may be appropriate.
Questions to discuss with your adviser
When developing your documentation procedures, consider discussing the following with your legal or compliance adviser:
- Which of your services are designated services under the legislation?
- What level of customer identification is appropriate for different transaction types?
- How should enhanced due diligence procedures be documented?
- What triggers should prompt escalation to the compliance officer?
- How should records be organised and retained?
- What training is appropriate for different roles within the agency?
Read our complete Tranche 2 Guide
Key dates, affected sectors, obligations and how to prepare
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HeadStart Docs™ provides free compliance documents for real estate professionals. All documents require legal review and tailoring to your specific circumstances.
Disclaimer: This article is general information only. It is not legal, financial or compliance advice. HeadStart Docs™ provides free compliance documents, not legal services.
We do not guarantee the accuracy of information provided. Obligations may apply depending on your designated services. Always confirm your specific requirements with a qualified adviser.
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