Clarity Over Complexity:AML Made Practical for Real Estate & Conveyancing

What is AML Tranche 2 and why does it affect real estate?

Kylie: We're here to talk about one of the biggest issues in real estate at the moment — the new AML regulations. David, what's the current state of play?

David: Until recently, there's been very little you've had to do around verifying buyers and sellers. Tranche 1 introduced verification of identity. Tranche 2 is about extending that due diligence so you have a better picture of who your customers are. This process happens in parallel to your day-to-day — there's very little additional work if you're using Forms Live.

Kylie: Why is real estate being singled out?

David: Real estate isn't being singled out — Tranche 2 includes precious gems dealers, accountants, conveyancers, and other sectors. Between 2019 and 2024, over $720 million worth of real estate was seized due to money laundering and crime-related transactions. It's a genuine risk, and Tranche 2 is about reducing it.

Key point: Tranche 2 is an extension of existing AML obligations, not a brand new framework.

Red flags, policies, and what counts as suspicious

Kylie: What would the red flags be for agents?

David: Tranche 2 has two components. First, as a principal, you set out your business's policies and procedures — for example, not accepting a physical cash deposit over $5,000, or ruling out cryptocurrency. Separately, when you go through CDD with a specific buyer or seller, certain results might flag — for example, if someone appears on a politically exposed persons (PEP) list. That's when you'd report to AUSTRAC.

Important distinction: A "cash offer" on a property is not the same as a physical cash deposit. Agents can accept cash offers — it's physical banknotes handed over as a deposit that your policy should address.

David: AUSTRAC has released a starter pack you can use as a template. One of our integration partners, easyAML, has those policies and procedures built into their platform and is currently offering free registration until July.

The Tranche 2 timeline: what to do before July

David: I break Tranche 2 into two components. PDD — personnel due diligence — covers your policies, procedures, and staff training, and needs to be sorted before July. Then there's CDD — customer due diligence — your day-to-day transaction process from 1 July onwards.

Timeline at a glance: 31 March 2026 — AUSTRAC enrolment opens. Before 1 July — set policies, procedures, and compliance roles (PDD). From 1 July — customer due diligence begins on all qualifying transactions (CDD).

David: Our current integrations include easyAML, First AML, AMLHUB, Securexchange, and APLYiD. Larger agencies will likely suit a subscription model; for smaller or lower-volume needs, Securexchange offers a pay-per-verification model.

Reporting to AUSTRAC: what agents need to know

Kylie: If someone turns up with a duffel bag of cash and you say you can't accept it, do you still have to report it?

David: No — at that point you haven't gone through the CDD process, so you simply decline. The reporting obligation only applies once you're further into due diligence and a red flag comes up. Reporting to AUSTRAC doesn't stop your transaction; you're flagging it for investigation, not making the judgment call yourself. You must report — full stop — but as long as you're making a genuine best effort, you're covered.

Verification of identity (VOI) explained

David: VOI is about proving the person you're dealing with is who they say they are — it doesn't tell you if they're involved in a crime. In Forms Live, you initiate a VOI, the buyer or seller receives a link, and completes it on their mobile, uploading ID and taking a live photo. Our AML providers also run liveliness checks to prevent AI-generated fake images from passing.

The 15-day rule: CDD must be completed within 15 days from the point of engagement. It runs in parallel to your transaction, not sequentially — it won't hold up a sale.

David: For auctions, only the winning bidder needs verifying — you sign the contract, start CDD in parallel, and have 15 days to complete it. For sellers, once verified, you don't need to re-verify unless more than two years have passed.

Demo: integrated AML in Forms Live (easyAML)

[Forms Live AML integrations demonstration]

David: I'm opening a standard Sales Authority. While it's in draft, I can start the AML CDD process, or after the form has been sent for signing. In Connections, I select easyAML and log in — because I've done this once before, it auto-connects. The form has already pulled the vendor's details automatically, and I initiate verification with a single click. The customer receives a link on their phone and completes the process themselves.

Kylie: So it's one click for the agent?

David: One click. In more complex cases — companies, trust structures — the compliance officer may need to do additional work, but for a standard residential sale, that's the agent's entire involvement.

Demo: manual CDD forms in Forms Live

[Forms Live AML forms demonstration]

David: If you'd rather not use an integrated provider, we have our own forms for individual and company onboarding, based directly on the AUSTRAC starter pack, sent via Info Request so customers complete the details themselves.

Kylie: So you're not paying a subscription fee, but you're responsible for your own audit trail?

David: The audit trail remains in Forms Live, so that's covered — what you're not getting is full automation. If you go manual, identity documents will be stored somewhere; Forms Live is ISO 27001 compliant, so storage within the platform is fine, but printing and filing passport copies is where the data risk sits.

The Forms Live app and KYC tracking

David: The Forms Live app is coming out very soon, giving agents a mobile view of all forms currently out for signing. We're adding a KYC tab so you can see at a glance where each customer is in the verification process — who's completed it, who's still outstanding — and follow up from your phone.

Kylie: So this isn't specifically for AML, but a new tool to help agents stay on top of it on the road?

David: Exactly. KYC and KYB as an umbrella across the whole process.

Top 3 tips before 1 July 2026

David: 1. Read the AUSTRAC starter pack and set your policies — thresholds for physical cash, cryptocurrency, and document them. 2. Sign up to easyAML for free before July to understand what CDD looks like in practice, even if you choose a different provider later. 3. Do a test run before July so your team is comfortable before it's live.

Kylie: Change is always awkward until it becomes familiar. Countries like New Zealand are already doing this — it's business as usual for them. The goal is to get as familiar as possible with what's coming so that by the time it's live, it already feels routine.