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How does delayed diligence apply to conveyancers, lawyers, and settlement agents (Rules s 6-15)?

Conveyancers and settlement agents can start a buyer-side service before initial CDD is complete; CDD must finish 28 days after exchange or before settlement.

Overview

Delayed initial CDD lets you begin providing a service before identity verification is complete, within defined limits. The exact rule differs slightly between conveyancers/lawyers and real estate agents/brokers.

Conveyancers, lawyers and settlement agents (Rules s 6-15)

For professional services related to a real estate sale, purchase or transfer, you can start providing the service to a buyer/transferee before initial CDD is complete. Initial CDD must then be completed 28 days after exchange of contracts, or 3 days before settlement, whichever is earliest. This is slightly more lenient than the brokering rule because conveyancers do legitimate preparatory work - drafting contracts, title searches - before any actual transaction exists.

Real estate agents and brokers

The core rule is split-party: you must complete initial CDD on the party you're acting for before starting the designated service, but you may delay CDD on the other party to the same 28-days-after-exchange / 3-days-before-settlement deadline (whichever is earlier).

  • Seller's/vendor's agent - the vendor must be verified before you start brokering (before the agency agreement is signed and marketing begins); the buyer can be delayed.
  • Buyer's agent - the buyer must be verified before you sign the representation agreement; the vendor can be delayed. A buyer's agent only starts providing a designated service to the vendor when the transaction is reasonably expected to proceed (typically at contract signing).

Auctions

AUSTRAC explicitly contemplates auctions: the buyer often can't be identified until the fall of the hammer, and the short window between auction close and contract signing usually doesn't allow full initial CDD on the successful bidder. AUSTRAC treats this as a textbook case where delay is justified.

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