Tranche 2, eight weeks in: what real estate agencies are getting wrong

First, the part most agencies got right

Credit where it is due. Most Sunshine Coast and Moreton Bay agencies we deal with enrolled with AUSTRAC, adopted an AML/CTF program, and nominated a compliance officer before commencement. That is the visible layer, and it was well covered by the industry bodies.

The problems are not in the visible layer. They are in what happens between the listing appointment and settlement, where the program says one thing and the sales team does another. AUSTRAC's consistent message across other reporting sectors has been that it is far less interested in whether you have a document than in whether your business actually does what the document says.

Mistake 1: treating it as a settlement task instead of a listing task

The single most common failure we see is timing. Verification is being pushed down the chain to whoever handles the paperwork after a contract is signed, on the assumption that it is a conveyancing-adjacent formality.

It is not. The designated service is the brokering of the transaction, and the customer due diligence needs to be in place before or at the point the service is provided — not once the deal is done. Leaving it until after contract creates two separate problems: you have already acted, and you have lost all your leverage to ask for documents from a party who now has what they wanted.

The practical fix is to move identification into the listing appointment and the offer form. An agency that collects it at the front door never has an awkward conversation, because it is simply part of the process rather than a suspicion directed at a particular person.

Mistake 2: verifying the person in front of you, not the customer

Sales agents are naturally trained to deal with the person who walks in. The regime is not interested in that person as such — it is interested in who the customer actually is and, where the customer is not an individual, who ultimately owns or controls it.

So the licence check on the man signing the contract does nothing if the buyer is a company he is a director of, or a family trust with a corporate trustee. You need to know the entity, the trustee, and the beneficial owners behind it. Layered structures — a company owned by a trust owned by another trust — are exactly the arrangements the regime exists to look through, and they are extremely common in ordinary Queensland investment purchases.

This is where most agencies quietly discover they cannot do it in-house. Reading a trust deed to work out who controls a trust is legal work, and it is the reason a reliance arrangement with a law practice makes sense for anything other than a plain individual buyer.

• Individual: identity verified, plus checks where they are acting for someone else
• Company: the company itself, its directors, and anyone holding more than the beneficial ownership threshold
• Trust: the trustee, the terms of the trust, and the classes of beneficiary
• Corporate trustee: both layers, plus whoever controls the corporate trustee
• Anyone signing under a power of attorney: the attorney and the principal

Mistake 3: a risk assessment that rates everything medium

A risk-based system only works if it actually discriminates. We have seen agency programs where every transaction is rated the same, which means the enhanced due diligence limb is never triggered and the whole framework is decorative.

Rating is not about whether you personally distrust the client. It is about objective features of the transaction. Off-the-plan purchases by offshore entities, purchases well above the buyer's apparent means, and any deal where the funds path is unclear sit higher on the scale than a local family buying a Golden Beach unit with a Big Four pre-approval.

• Buyer or seller located overseas, or funds sourced from overseas
• Complex ownership structures with no evident commercial purpose
• A purchaser who is indifferent to price or unusually keen to settle early
• Substantial physical cash anywhere in the transaction
• A politically exposed person, domestic or foreign, or a close associate of one
• Rapid resale of a property bought a short time earlier at a very different price
• A third party paying the deposit with no explained connection to the buyer

Mistake 4: nobody knows what to do with a suspicion

Ask a sales team what happens if something feels wrong and the honest answer is usually that they would mention it to the principal, who would think about it. That is not a process, and it is the gap that turns an agency's compliance problem into an individual's problem.

A suspicious matter obligation is triggered by a state of mind — suspicion on reasonable grounds — and once it arises the reporting clock is short. Whether or not the deal proceeds, whether or not the suspicion turns out to be right, and whether or not anyone loses money is beside the point. The obligation attaches to the suspicion.

Every agency needs one named person, a single internal escalation form, and a standing relationship with someone who can advise on whether the threshold is met. Deciding that question is legal analysis, and getting it wrong in either direction has consequences.

The bit that should worry the individual agent

Almost all of the published material addresses the agency. That framing is comfortable and slightly misleading, because it lets an individual salesperson assume this is the principal's problem.

In practice, obligations in this area are supported by offence provisions that can reach the people who actually do the conduct, not only the entity whose name is on the enrolment. An officer, employee or agent who takes part in the relevant conduct is exposed in their own right. On top of the statute, an agent's licence sits under a separate regulatory regime that takes a dim view of conduct falling short of what the law requires.

The practical consequence is simple: if you are the agent on the file, you cannot rely on the fact that head office bought a compliance platform. You need to know what you personally are required to collect, when you are required to stop, and who you tell.

Tipping off — the trap nobody briefs the sales team on

This is the one we would most like every agent in our area to understand, because it is counter-intuitive and the instinct of a good salesperson is exactly the wrong instinct.

If a suspicious matter report is made, disclosing that fact in a way that could reasonably be expected to prejudice an investigation is an offence. Not a compliance breach — an offence. And the natural human response of a helpful agent, who wants to keep the client informed and keep the deal alive, is to explain why things have gone quiet.

The 2024 reforms moved the prohibition from a rigid blanket rule to a prejudice-based test, which is more workable but also more nuanced, because it now requires judgement about what a disclosure could be expected to do. Judgement calls of that kind are not something to make in a car park at the end of an open home.

The rule for a sales team should be absolute and simple: you never tell anyone — not the client, not the other agent, not the buyer's broker, not your partner at dinner — that a report has been made or is being considered. All questions go to one person. That person takes advice before saying anything at all.

What a solicitor can do here that a compliance service cannot

There is a growing market of AML products aimed at agencies, and the good ones do the mechanical work well: electronic verification, screening, record storage. We use those tools ourselves. But there is a category of question they cannot answer, because answering it is the practice of law.

Whether a particular set of facts amounts to suspicion on reasonable grounds is legal advice. Whether a disclosure would prejudice an investigation is legal advice. What a trust deed means, who controls a corporate trustee, and what an agency should do when its own client appears to be the problem — all legal advice. Advice given by a law practice also attracts legal professional privilege, which advice from a service provider does not.

That distinction matters most at exactly the moment an agency is under pressure. A compliance platform will flag a transaction. It will not tell you what to do next, and it will not stand behind the decision.

The four hard conversations, word for word

Agents do not need another framework. They need the sentences. These are the ones we give the agencies we act for — say them early, say them the same way every time, and treat them as ordinary process rather than an accusation.

The vendor who thinks it is an insult: "This is new law that applies to every agency in Queensland from July, and I have to do it for every single seller — I did it for the last four listings I took. It is a five-minute electronic check and then it is done."

The overseas or third-party deposit: "The law now makes me record where the funds are coming from, and my office cannot process an offer without it. Can you send me a short note on the source and the account holder's connection to you? It is a record-keeping requirement, not a judgement about you."

The trust or company buyer: "Because the buyer is a company, I have to identify the people behind it as well as the entity. Can you send me the trust deed or the ASIC extract, and the details for the directors? Your solicitor will already have this — I am happy to get it from them directly if that is easier."

The buyer who will not produce identification: "I'm not able to progress the offer without it, and that isn't an agency policy I can waive — it's a legislative requirement on me personally. I'd rather sort it out now than have it hold up your settlement."

• Deliver it at the listing or the offer, never mid-negotiation
• Frame it as universal — the word "every" does most of the work
• Blame the statute, not your office and never the client
• Offer to get the documents from the party's solicitor instead
• Never explain a delay by referring to a report or a concern

A ten-minute self-check for a principal

If you want to know where your agency actually sits, ignore the folder and ask your newest salesperson these questions. The answers tell you more than any audit.

• At what point in your process do you collect identification, and who does it?
• What do you do differently when the buyer is a company or a trust?
• Name the person you escalate a concern to, and the form you use.
• What are you allowed to say to a client if a matter has been reported?
• Where is the identity data stored, who can see it, and for how long is it kept?
• When did your program last change in response to something that happened?

How we work with agencies

We act for agencies across the Sunshine Coast and Moreton Bay under a written reliance arrangement: we carry out and record the customer due diligence, and the agency relies on our work rather than building the capability in-house. The agency stays the reporting entity and keeps its own enrolment, program and compliance officer — reliance covers the due diligence limb, properly documented.

Alongside that we do the part a platform cannot: a solicitor on the phone when a file goes sideways, a written view on whether a suspicion has crossed the threshold, and a briefing for your sales team so the four conversations above are second nature. Where the agency also sends us the conveyancing, we are verifying the same parties anyway, so the marginal cost is small.

If you would like us to look at how your agency is running in practice, call 0488 340 853. There is no charge for the initial review and we will tell you plainly if you do not need us.

General information only

This article is general information about Australian anti-money laundering law as it applies to Queensland real estate agencies. It is not legal advice and it is not a substitute for advice on your agency's own circumstances. Obligations under the AML/CTF regime and AUSTRAC's guidance continue to develop, and the position may have moved since this page was updated.

AML for Queensland real estate agents — common questions