A settlement date does not change when you must verify a buyer. Delayed initial customer due diligence (CDD), the identity checks that establish who your customer is, lets you start a real estate transaction before the buyer is verified. It runs to a fixed window, it is available only where its conditions are met, and the window is anchored to dates that do not move when the deal does.
You are in this position because you are a reporting entity: a business that provides a designated service. For real estate agents, legal practitioners and conveyancers, the customer due diligence obligations started on 1 July 2026, so this is the allowance’s first year in live transactions. If you are still working out whether your practice is captured at all, start with the designated services page; the customer due diligence page is the companion to this one, covering what counts as verified identity information.
The two conditions that come before everything else
The default is that initial CDD happens before the service. Delay is an exception, and both of these must be true on reasonable grounds before you start providing the service:
- delaying initial CDD is essential to avoid interrupting the ordinary course of business, and
- there is a low additional ML/TF risk in delaying.
You must also already have AML/CTF policies that complete initial CDD as soon as reasonably practicable and that mitigate the risks the delay creates. AUSTRAC is explicit that inconvenience to you or the customer is not a sufficient reason, and that you must be able to demonstrate how you concluded the added risk was low. A bidder who is only identified at the fall of the hammer is the case the rule exists for; a file you simply did not get to is not.
The real estate window: 28 days, or 3 before settlement
For real estate transactions the rule is s 6-32 of the AML/CTF Rules 2025, and it reads the same way whoever you are:
- A real estate agent brokering the sale, purchase or transfer has both the seller and the buyer as customers. Once you have started brokering for one side, you may delay initial CDD on the other (s 6-32(1) and (2)). Engaged by the seller first, the allowance does not cover the seller, and you may complete CDD on the buyer later. Engaged by the buyer first, the same structure applies the other way round.
- A firm assisting in a real estate transaction (Table 6 item 1), such as a legal practitioner, conveyancer or accountant, may start before initial CDD is complete on a customer who is or is to be the buyer or transferee, including the client you act for (s 6-32(3)). The allowance does not cover a customer who is the seller or transferor.
In both cases the deadline is the same: 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 is earliest.
There is no separate, shorter conveyancing window. If you have seen a 15-day figure, it comes from earlier starter-kit form text, not from the Rules as AUSTRAC now states them.
The dates that anchor the window do not move
The settlement limb runs from the day for settlement initially agreed, not the day settlement actually happens.
- A settlement pushed back by a bank delay, a vendor’s hold-up or a requisition exchange does not push your deadline back with it.
- A settlement brought forward does not pull your deadline in either, because the anchor is still the date originally agreed.
The exchange limb is equally fixed at 28 days from exchange of contracts. So your deadline is knowable on the day of exchange, and it stays knowable no matter what the transaction does afterwards. Write it down then.
Outside real estate: the general 20-business-day allowance
Delayed initial CDD is not confined to real estate, and the claim that every other professional service must verify up front is wrong. The other routes are:
| Situation | Rule | Deadline |
|---|---|---|
| A designated service provided at or through a permanent establishment in Australia | s 6-12 | As soon as reasonably practicable, no later than 20 business days |
| A financial institution opening an account or allowing deposits | s 6-13 | As soon as reasonably practicable, within 20 business days |
| Certain financial market transactions that must occur rapidly | s 6-14 | As soon as reasonably practicable, within 5 business days |
| A real estate transaction | s 6-32 | 28 days after exchange, or 3 days before the initially agreed settlement day, whichever is earliest |
| A designated service provided in a foreign country | s 6-15 | Per the foreign country’s law |
The general s 6-12 route carries a hard stop that the real estate rule does not: whatever the 20 business days say, you must complete initial CDD before you transfer, or allow or facilitate the transfer of, money, property or virtual assets for the customer, or otherwise make them available. In practice that stop usually bites long before the 20 days do.
What the delay covers, and what it does not
What changes is timing, not substance. The verification you do under the allowance is the same initial CDD you would have done up front: identity information collected and verified, and, where the customer is a company or trust, the beneficial owners identified, meaning the people who ultimately own or control it.
Using the allowance changes nothing about your other obligations. If a suspicion forms about a party, the suspicious matter report (SMR) clock starts immediately: three business days from when the suspicion forms, or 24 hours if it relates to terrorism financing, under s41(2) of the Act. A cash settlement of $10,000 or more still triggers a threshold transaction report (TTR) within ten business days, under s43(2). And once a suspicion has formed, take care what you tell the party: under s123 it is an offence to disclose that a suspicious matter report has been, or must be, given, or what it contains, where the disclosure would or could reasonably be expected to prejudice an investigation (tipping off). It carries up to two years imprisonment, 120 penalty units, or both, and it does not matter whether an investigation has started.
Civil penalties may apply if you do not verify the customer’s know your customer (KYC) information within the required timeframe. If the window closes with verification unfinished, you have provided the service without completed CDD, and the allowance does not cover that gap.
| Party in the transaction | Verification timing | Condition |
|---|---|---|
| Legal practitioner or conveyancer: a customer who is or is to be the buyer or transferee, including your own client | After the service begins: as soon as reasonably practicable, and no later than 28 days after exchange or 3 days before the initially agreed settlement day, whichever is earliest | Both gateway conditions met before starting; verification completed inside the window (s 6-32(3), (4)) |
| Real estate agent: the side you started brokering for second | The same window | The same conditions (s 6-32(1), (2), (4)) |
| Legal practitioner or conveyancer: a customer who is the seller or transferor; real estate agent: the side you started brokering for first | Not covered by the real estate allowance | Complete initial CDD before you start, unless another allowance applies |
| Any party once a suspicion forms | SMR due 3 business days from the suspicion, or 24 hours for terrorism financing (s41(2)) | Delayed verification does not pause the clock |
| Any party in a cash settlement of $10,000 or more | TTR due within 10 business days (s43(2)) | Reporting stands regardless of verification timing |
What catches people out
The allowance is conditional, not a default
If the engagement does not meet the two gateway conditions, you verify before you act, settlement pressure or not. Treating delay as a convenience you can apply to any file leaves you providing a designated service with no CDD behind it, and there is no allowance to point to when it is challenged.
The settlement timetable does not extend the window
The deadline is fixed at exchange, off the initially agreed settlement date. Miss it and the verification is late, and the lateness is visible in your records, which you keep for seven years.
Not every party is covered
For a real estate agent, the allowance reaches the side you started brokering for second, not the side that engaged you first. For a firm assisting in a conveyance, it reaches a buyer or transferee customer, not a seller or transferor. If you treat the whole file as delayed, the party outside the allowance was never covered, and that is where a review finds the gap.
Where to start
- Make and record the two determinations: before you start, write down why delay is essential to avoid interrupting the ordinary course of business and why the added ML/TF risk is low. Those two findings are the basis of the allowance, and an undocumented one is hard to defend later.
- Set the deadline on the day of exchange: record the exchange date, the initially agreed settlement date, and the earlier of exchange + 28 days and settlement − 3 days. That figure does not change afterwards.
- Record the decision and keep the records: record which party the allowance covered, why, and when verification was completed. CDD records are kept for seven years, so the file has to show the timing decision as it stood, not as it looks after settlement.
How duely handles this
In duely, customer due diligence is done once per customer and risk is assessed per engagement, so a real estate or conveyancing engagement carries its own scoping decision and its own record of which CDD it relies on, and the workflow is paced to settlement rather than to onboarding. When you record a delayed CDD decision on a property engagement, duely takes the exchange and settlement dates, sets the deadline, and raises it in the monitoring queue as it approaches and again if it passes.