Tranche 2 AML/CTF Reforms
Reliance Agreements: What You Need to Know Before 1 July 2026
The biggest regulatory shift to hit the Australian property sector in decades is almost here. Here's a plain-English guide to one of its most practical tools — and how to use it well.
The big picture: why this is happening
For years, Australia lagged behind its international partners in regulating so-called "gatekeeper" professions — the lawyers, accountants, and conveyancers who sit at the gateway to property and financial markets. The Financial Action Task Force (FATF) had long flagged Australian real estate as a high-risk avenue for laundering illicit funds, with property transactions offering a way to layer and integrate large sums while projecting an air of legitimacy.
The Tranche 2 amendments to the AML/CTF Act 2006 close that gap. From 1 July 2026, any real estate agent who assists in planning or executing the sale, purchase, or transfer of real estate — including preparing contracts, conducting title searches, or holding funds in trust — is a regulated reporting entity with formal compliance obligations.
Those obligations include enrolling with AUSTRAC, designing and implementing a written AML/CTF program, conducting Customer Due Diligence (CDD) on clients, screening against sanctions lists, monitoring transactions on an ongoing basis, and lodging Suspicious Matter Reports (SMRs) where required.
Enter the reliance agreement
Here's where it gets practical. In a typical property transaction, a buyer or seller might interact with a real estate agent, a conveyancer or lawyer, and possibly a buyer's agent — all of whom now have independent AML/CTF obligations. Without some mechanism to share compliance work, the same client could be asked to verify their identity and submit to due diligence checks two, three, or even four times for a single transaction. That's a poor client experience and an unnecessary compliance burden.
The AML/CTF Act addresses this through the reliance mechanism — a formal provision that allows one reporting entity to rely on the customer due diligence checks already completed by another, rather than duplicating those checks independently.
How it arises
A conveyancer and a real estate agent are both engaged on the same transaction and both have CDD obligations toward the same client.
What it allows
One party (the relying entity) formally agrees to accept the CDD completed by the other (the relied-upon entity), avoiding duplicate checks.
What's required
A written reliance agreement formalising the arrangement, specifying the scope and obligations of each party.
Who remains responsible
Reliance does not transfer liability. The relying entity remains legally responsible for any compliance failures.
In property transactions, the most common pairing will be conveyancing practices entering reliance agreements with real estate agencies. But the mechanism isn't limited to this pairing. Buyer's agents, mortgage brokers, accountants, and commercial agents operating as reporting entities may also form reliance agreements where their services overlap for a shared client. A conveyancer can hold agreements with multiple agencies simultaneously.
Two types of reliance arrangement
AUSTRAC's framework contemplates two distinct models for reliance, each carrying different levels of protection and administrative commitment.
Option 1 — Ongoing CDD arrangement
- A standing agreement covering all shared clients across multiple transactions
- Provides "safe harbour" protection if the agreed conditions are met
- Requires a formal written agreement specifying each party's obligations
- The relied-upon entity must actually complete the CDD to the required standard
- Best suited to ongoing referral relationships between conveyancers and agencies
Option 2 — Case-by-case reliance
- Reliance agreed on a transaction-by-transaction basis
- No standing agreement required — more flexible
- Does not attract the "safe harbour" protection
- The relying entity bears greater exposure if something goes wrong
- More appropriate for occasional or one-off transactions
For most conveyancing practices with established referral networks, the ongoing arrangement — while more administratively demanding upfront — offers the stronger compliance position. The safe harbour protection provides meaningful risk reduction, provided the conditions of the agreement are genuinely adhered to.
What goes into a reliance agreement?
A reliance agreement is not a simple letter of introduction. It is a formal written instrument that should clearly address the following elements:
- Identification of the parties
Both reporting entities must be named, along with their AUSTRAC enrolment details and the designated services each provides. - Scope of the reliance
The agreement should specify which CDD steps the relied-upon entity is responsible for completing — identity verification, beneficial ownership checks, risk assessment, and so on. - Information-sharing obligations
Critically, the relying entity must be able to obtain the underlying CDD information — not just a confirmation that checks were done. The agreement should specify how and when that information will be provided. - Standard of CDD expected
The agreement should confirm that the relied-upon entity's checks meet AUSTRAC's required standard, including any enhanced due diligence requirements for higher-risk clients. - Record-keeping arrangements
AML/CTF compliance records must be retained for a minimum of seven years. The agreement should address how each party will store and, if required, provide records to AUSTRAC. - Notification of changes
If either party's circumstances change — a change in ownership, a compliance failure, a change in risk appetite — the agreement should require prompt notification to the other party.
Can Conveyancing.com.au offer a reliance agreement?
Yes. We are already working with several of our partners who have requested a reliance agreement with us.
Please contact our General Manager (tim.strickland@conveyancing.com.au) if you would like us to support your AML/CTF compliance obligations.
