Real estate agents face new challenges as they become key players in anti-money laundering efforts under new laws.
Property buyers and sellers may face unprecedented scrutiny under sweeping new anti-money laundering laws ‒ but local agents warn they are being forced onto the front lines of law enforcement without protection.
Hold tight - we’re checking permissions before loading more content
Real estate professionals, along with a range of other financial professionals, are now required to take reasonable steps to verify home buyers and sellers under new Anti-Money Laundering and Counter Terrorism Financing laws.
AUSTRAC chief executive Brendan Thomas said the reforms, which started on July 1, would “put more eyes” on the ground where criminal exploitation occurs.
“We see criminals targeting areas like real estate and professional services to move and hide illicit money, often using trust and company structures to make it harder to detect,” Mr Thomas said.
“Bringing these sectors into the regime is about closing those gaps – putting more scrutiny on high-risk transactions and stopping dirty money at the point it enters the system.”
It also brings Australia’s AML/CTF laws up to an internationally recognised standard, as recommended by the Financial Action Task Force, a global body that sets policy on financial crime.
Lynn Hall, director of Echuca Ray White, says that while the laws will eventually become second nature, they place real estate agents in a difficult position.
While the laws won’t affect most people, Ms Hall told TheRiv that some people may face more scrutiny than others.
Lynn Hall, director of Ray White Echuca.
Photo by
Jemma Jones
She said they may need to start asking questions to certain clients buying houses such as their source of funds, whether they required a loan and which financial institution they were using.
And when clients sell their houses, she may need to ask what they plan to do with the money.
Clients are now assessed by risk level. This involves checking their identification, and checking whether clients are subject to international sanctions or classified as a politically exposed person (PEP).
If a client is assessed as high-risk, someone who may have criminal affiliations, the matter is reviewed by a dedicated compliance officer before any suspicious activity is escalated to AUSTRAC.
Ms Hall said this system effectively put real estate agents on the front line.
“In the instance that we did come across somebody who had bad criminal connections – where’s our protection? I don’t have a badge or a gun,” Ms Hall said.
“I’m a qualified real estate agent; I’m not a qualified member of the federal police.”
To manage the burden, many real estate firms are turning to government-approved third-party digital verification platforms — an added compliance expense that will ultimately be absorbed into the cost of doing business.
And if they don’t ask questions, Ms Hall said the agencies face serious consequences.
“The fines are actually not tens of thousands – you’re running into the millions. So nobody can afford not to be doing (the checks),” she said.
She said that, like all new reforms, this would eventually become part of everyday practice — but in the meantime, she is asking the community for patience and understanding.
“I understand the government needs to do something to stamp this out, and it will become part of the process... but as long as the public don’t think it’s us being nosy and understand that it’s a process.”
