Why "the conveyancer probably checked" isn't good enough under Tranche 2

Compliance is not transferable between the professionals in a property transaction.

Under AML/CTF Tranche 2, your agency, the conveyancer, the broker, and any adviser involved each carry their own separate obligation to identify and verify the client. Assuming a counterpart already did it is not a defence, and it never was.

The fastest way to have your own record

The fix is not "trust the chain less." It is having your own evidence, independent of what anyone else in the transaction did.

1. Sign up — around 2 minutes. Enter your ABN and AML Simple pulls your registered business details from the ABR automatically.
2. AUSTRAC Readiness Check — around 5 minutes. Shows exactly where your agency's program stands against Tranche 2 obligations, including customer due diligence.
3. Client screening — you run your own identity verification and sanctions/PEP check on each client, timestamped and stored against that file. It does not depend on what the conveyancer, broker, or anyone else did or didn't do.

Your agency has its own evidence trail. That's the part that used to be assumed away.

Why the old assumption stopped being safe

Property transactions have always run through a chain of professionals: the agent, the conveyancer or solicitor, sometimes a mortgage broker, occasionally a financial adviser. Before Tranche 2, only some of those roles carried AML/CTF obligations, and it was common for everyone to loosely assume "someone in the chain has this covered."

Tranche 2 brings real estate agents, along with a wider set of professional services, into the regulated population directly. Each reporting entity in that chain now has its own obligation to conduct customer due diligence and to keep its own records. One party's checks do not automatically satisfy another party's obligations.

There is a narrow, specific exception. Current guidance points to AML/CTF Rules 2025 (Division 8, dealing with reliance on collection and verification of KYC information) as the mechanism that lets one reporting entity rely on another's CDD, but only where the conditions in that rule are met and the reliance itself is documented. It is not a general licence to assume someone else handled it, and it does not remove your agency's own record-keeping obligation.

Skip that step, and your agency has no independent proof it verified its own client if AUSTRAC ever asks. "The conveyancer probably checked" is not a record. A file with a screening result, a document type and number, and a timestamp is.

What this looks like in practice

A buyer's deposit is due. Your agency hasn't independently verified who the buyer is, on the assumption the conveyancer handling settlement will check identity as part of their own process. If the conveyancer's checks are incomplete, delayed, or never actually happen, your agency has no record of its own that CDD occurred at all, on a file where a designated service was provided.

The safer default: treat every client file as your agency's own responsibility from the first contact, not something someone else in the chain will pick up later.

Doing it yourself

If you're not using a tool for this, the same steps still apply manually:

• Collect identity information from the client directly, rather than relying on documents that pass through another party
• Record the verification method used (document sighting, video call, or an electronic check) against the client file, with a timestamp
• If you do rely on another reporting entity's CDD under Division 8, document that reliance explicitly, including which entity performed the checks and when
• Keep every record for 7 years, per the general record-keeping obligation in AML/CTF Act 2006 s 107

Penalties for non-compliance can reach up to A$36,400,000 per contravention for a body corporate, or up to A$7,280,000 per contravention for an individual, under AML/CTF Act 2006 s 175.

The point that matters

Nobody in the transaction chain is checking on your agency's behalf. Your agency's compliance record has to stand on its own, whether or not anyone else in the deal did their part properly. Get started free and have that record in place before it's needed.