Ask a selling agent who their customer is and you will get a confident answer. The vendor. The vendor signed the agency agreement, the vendor pays the commission, the vendor is the name on the file. Two months into the new regime, most agencies have built their CDD routine around exactly that answer.
AUSTRAC's guidance gives a different one. If you are brokering the sale, purchase or transfer of real estate, "the customer is both the seller and the buyer", and you "must also complete initial CDD on the parties you are and aren't acting for" (AUSTRAC, initial CDD for individuals, updated 31 March 2026). A selling agent identifies the buyer. A buyer's agent identifies the seller. That is not a courtesy or a best practice; it comes from section 28(2) of the Act and section 6-33 of the Rules, and AUSTRAC's own starter kit forms have a whole section for it.
The logic is uncomfortable but sound. In most sales the person bringing the money is not the agent's client. If the only person anyone checked was the vendor, a purchase with laundered funds would sail through the sale side without meeting a single checkpoint, which is precisely the pattern Operation Claw pulled out of the mortgage books earlier this month. The reformed Act closes the gap by making the stranger across the table your problem too.
Two different clocks
The rule would be unworkable if both checks were due up front. You cannot identify a buyer who does not exist yet. So the timing splits (AUSTRAC, delayed initial customer due diligence, updated 22 April 2026):
- Your own client: before the service starts. The seller's agent completes initial CDD on the seller before providing them with a designated service, the same before-you-act rule that applies everywhere else.
- The party you are not acting for: a delayed clock. You may complete initial CDD on the other side as soon as reasonably practicable, and no later than 28 days after the exchange of contracts, or at least 3 days before the initially agreed day for settlement, whichever comes first.
Run the numbers on your own contracts. On a standard six-week settlement, exchange plus 28 days lands first. On a short two-week settlement, settlement minus 3 days arrives before the 28 days do, and your window shrinks to eleven. And note the word "initially": the deadline runs from the settlement day first agreed, so a renegotiated later settlement date does not obviously buy your CDD more time. Diarise from the original one.
Two conditions sit in front of the delay, and your program has to carry them. Before you rely on it, you must be able to show that delaying CDD was essential to avoid interrupting the ordinary course of business, and that the additional ML/TF risk of delaying was low. Your AML/CTF policies must set out when you will use the delay and how you manage the risk (AUSTRAC, delayed initial customer due diligence). Auctions are AUSTRAC's own worked example of "essential": it is not possible to complete initial CDD on the successful bidder before the auction starts, because you do not know who they are.
Check which version of the form you are holding
One trap for early movers. The starter kit CDD forms released in January 2026 gave the counterparty deadline as 15 days after exchange. The Rules were amended at the end of March 2026 and the timeframes moved with them (AUSTRAC, latest guidance updates): the current forms and the delayed CDD guidance both say 28 days after exchange, or 3 days before the initially agreed settlement day. Even AUSTRAC's worked-examples page still narrates a 15-day version in one scenario (AUSTRAC, real estate starter kit examples, updated 2 April 2026). If the form in your program says 15 days, you built from the January kit: you are holding the stricter, superseded number, and it is worth refreshing your documents from the current document library so your policies match the live guidance.
Two things the delay does not cover
The sanctions check cannot wait. The kit form is explicit: you cannot delay the sanctions check, and you must complete it as soon as possible using the counterparty's name, date of birth and address (AUSTRAC, real estate starter kit document library). In the worked examples, the agent screens the auction buyer "without delay" while everything else sits on the 28-day clock (AUSTRAC, real estate starter kit examples). If the name comes back as a possible sanctions or PEP match, you want to know in week one, not day 27.
The money cannot move first. The delay never runs through settlement. The kit form requires initial CDD to be complete before you transfer or allow the transfer of money or property for the client, or make money or property available to them. Delayed CDD is permission to start the paperwork later, not permission to settle unverified.
AUSTRAC's own auction scenario
The starter kit examples walk through exactly the situation that makes agents nervous (AUSTRAC, real estate starter kit examples). The hammer falls at $1.3 million. The seller's agent starts CDD on the successful bidder and asks the standard question: are you buying this for yourself? The answer is no. The bidder is a representative for a married couple who are the real buyers.
So the agent collects details for the representative and both buyers, verifies the representative's authority to act, and finds two medium risk factors: the buyers are family members of a domestic politically exposed person, and their buyer's agent is a reporting entity that is not enrolled with AUSTRAC. The agent applies delayed CDD (auction, low additional risk, controls in place), runs the sanctions screening immediately, verifies identities after exchange, and completes the file before settlement. Customer rated medium, monitored through to settlement, relationship ends there.
Notice two things. The are-you-buying-for-yourself question is doing heavy lifting; it is what surfaces the real customers behind the bidder. And an unenrolled buyer's agent appears in AUSTRAC's own kit as a risk factor on someone else's file. Every agency that skipped enrolment is now a red flag other agencies are trained to record.
When the other side will not cooperate
Your client wants to sell. The buyer, who owes you nothing and signed nothing with you, ignores your emails asking for ID. The Act does not make the sale hostage to the stranger's cooperation, but it does not let you shrug either. You are taken to have complied with the counterparty CDD obligation if all three of these are true (AUSTRAC, initial CDD for individuals):
- You took all reasonable steps to establish the other party's identity, including through reliance arrangements where possible.
- You recorded every step you took and the difficulties you hit.
- You considered whether a suspicious matter reporting obligation arises in relation to that party, and recorded that too.
The kit form adds the sentence that explains why the third condition exists: a counterparty's failure to cooperate is a strong indicator they may be disguising involvement in criminal activity (AUSTRAC, real estate starter kit document library). Deemed compliance is real, but it is earned with a paper trail, not assumed. Note the contrast with your own client: when your client refuses to provide ID, you stop acting. When the counterparty refuses, you document, consider an SMR, and the deal can still complete.
If the other side has its own enrolled agent, you can share the load instead: the kit form provides for a verification arrangement where the other reporting entity verifies information and provides it to you within 28 days of exchange. You still identify the risk, establish who you are dealing with, and run your own sanctions check; and if what comes back is late or below standard, you finish the job yourself before settlement (AUSTRAC, real estate starter kit document library).
Conveyancers and lawyers, same clock, different seat
The delay rule has a second limb for professional services related to a sale, purchase or transfer of real estate. A conveyancer or legal practitioner acting for a buyer can start helping before initial CDD is complete, then must finish it within 28 days after exchange, or 3 days before the initially agreed settlement day, whichever comes first (AUSTRAC, delayed initial customer due diligence). Here the delayed clock runs on your own client, which matters in practice: buyers engage conveyancers in a hurry, sometimes the afternoon before an auction. The conveyancer starter kit carries the matching form, and our conveyancers guide covers the rest of the sector's obligations.
The routine, in five lines
- Agency agreement signed: initial CDD on your client before brokering starts.
- Contract exchanged: diarise exchange plus 28 days and initially-agreed settlement minus 3 days. The earlier date is the counterparty CDD deadline.
- The moment you have the other side's name, date of birth and address: sanctions check, no delay.
- Other side professionally represented by an enrolled entity: consider a written verification arrangement, and verify it delivered.
- Other side unresponsive: record every attempt, consider the SMR question in writing, and only then treat the obligation as met.
Where AML Mate fits
The counterparty rule doubles the number of people on each file, which is exactly the kind of load that breaks a spreadsheet routine. In AML Mate, the buyer goes in as a client record alongside the vendor: screening against the DFAT Consolidated Sanctions List and PEP data runs automatically the moment they are added, which is the one check the delay does not cover, and the risk rating, verification steps and any escalation sit on a dated trail. When a file ends with a deemed-compliance record instead of a completed CDD, the notes and the audit export are the evidence that you earned it. The free check at /check shows where your current routine stands in five minutes.
The rule reads strangely the first time: running due diligence on someone who is not your client, did not choose you and does not pay you. But it is the answer to a question every agent has quietly asked at a settlement table: who checked the money? From 1 July, on the sale side of the transaction, the answer is you.
This article is general information, not legal advice. For advice specific to your circumstances, consult a qualified AML/CTF professional.