When does a real estate agent need to CDD a counterparty?

Overview

Always - unless the reliance provision is being used. There has been industry uncertainty, but AUSTRAC's position is clear: when a real estate agent acts in a transaction they provide a designated service to both parties - to the buyer on engagement and to the seller when the contract is signed - so both must be verified. CDD obligations attach when you start providing the service, not at settlement.

Seller's agents

A seller's agent starts providing a designated service to the seller/transferor when the agreement to broker the sale is signed, and to the buyer/transferee when it's reasonably expected the transaction will proceed - typically once the buyer's offer is accepted and the contract is signed.

Buyer's agents

A buyer's agent starts providing a designated service to the buyer/transferee when the agreement to find or identify a property is signed, and to the seller/transferor when the transaction is reasonably expected to proceed - again, typically at contract signing.

Multi-party transactions

Each obligation depends on the designated service you provide. In a typical transaction with four providers: the seller's agent CDDs the seller and buyer; the buyer's agent CDDs the buyer and seller; the seller's conveyancer CDDs the seller; the buyer's conveyancer CDDs the buyer. The exception is where one conveyancer handles both sides (common in intra-family, related-party or matrimonial transfers) - they must CDD both parties because they provide the designated service to each.

The reliance provision

A reliance provision lets the buyer's agent and seller's agent share their respective direct clients' CDD, with appropriate processes and written agreements in place. See AUSTRAC's Real estate designated services and Overview of reliance on customer identification by a third party (Reform) pages.