AML/CTF Rules 2025: Reporting groups for real estate sector

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Understanding AML/CTF Rules 2025 Part 2: Reporting groups, and what it means for the real estate sector

From July 2026, real estate agencies in Australia will be brought under AML/CTF obligations for the first time.

One of the key changes is the introduction of reporting groups – a framework that allows multiple agencies to share a single AML/CTF Program under the direction of a nominated lead entity.

Reporting groups for real estate

For the real estate sector, reporting groups are designed to streamline compliance by reducing duplication, centralising expertise, and creating consistency across connected offices or franchise networks.

But with these benefits come important questions about governance, liability and day-to-day operations that agencies need to address well before the rules take effect. The aim is to simplify compliance for connected offices or agencies that choose to collaborate.

For real estate, the big questions are:

• Should each office run its own AML Program, or is it better to group compliance at franchise or network level?
• Who should act as the lead entity, and how would this interact with franchisor–franchisee agreements?
• What happens if one agency in a group fails to meet its obligations?

What is a reporting group?

A reporting group is a set of businesses that agree to follow one AML/CTF Program under a lead entity.

There are two ways this can be established:

• Business group: For agencies that are already linked by ownership or control.
  Example: a franchisor with multiple company-owned offices.
• Election group: For independent agencies that aren’t owned by the franchisor but trade under its brand.
  Example: franchisee offices agreeing to follow the franchisor’s AML/CTF Program, with the franchisor as the lead entity.

The lead must be nominated in writing, have authority to set AML/CTF policy, not be controlled by another regulated entity, and be incorporated or resident in Australia.

Why it matters for real estate agencies

While the idea is straightforward, real estate agencies face unique challenges:

• Franchise networks: Centralised compliance may appeal to franchise brands, but it requires uniform processes across offices that are used to running independently.
• Independent agencies: Small offices may find compliance burdensome and be attracted to election groups with local peers. The trade-off is shared liability.
• Offshore buyers: Sales to foreign purchasers increase ML/TF risk, requiring consistent controls.
• Reputation: One non-compliant office can expose the whole brand.

Practical examples in the real estate industry

• Franchise business group: A franchisor with 50 branded offices could form a business group, with the franchisor company as lead. The Program sets standardised onboarding, recordkeeping and training rules for all offices.
• Election group of independents: Five independent suburban agencies form a reporting group nominating one office as lead; coordinating compliance and reporting for all.
• Property developer alliance: A group of boutique agencies partnering with a developer for off-the-plan sales consider an election group to streamline CDD on overseas buyers. The risk is whether the lead can manage such complex verification centrally.

Operational reality

Reporting groups affect day-to-day practice, not just governance:

• The lead entity designs and maintains the AML/CTF Program for all members.
• Verification, staff due diligence, and training requirements must be standardised.
• Failures in one office expose the group.
• CDD timeframes apply group-wide:
  • Property transactions – up to 15 calendar days or settlement, whichever is earlier.
  • Other matters – up to 20 business days.
• Joining and leaving follow strict rules.
• Reliance requires a written agreement.
• AUSTRAC must be notified of membership changes.

Governance and liability considerations

Joining a reporting group means a firm no longer sets AML/CTF obligations in isolation. The lead entity’s Program applies across all members, creating efficiencies but also shared risks. 

Lead responsibility: The lead entity’s AML/CTF Program applies to all members. This reduces duplication but removes flexibility for firms. Authority, liability and dispute processes must be clear.

Shared liability: AUSTRAC can sanction a non-compliant office, but the lead remains accountable for the Program as a whole.

Oversight: The Program must include regular reporting to the lead’s governing body and cover every member.

Staff checks and training: Group-wide standards apply to all offices. Offices cannot set lighter requirements independently.

Independent evaluation: At least every three years, the group Program must be reviewed independently, with findings reported to the lead’s governing body.

Reporting obligations: The Program must ensure accurate suspicious matter, threshold transaction and international funds transfer reporting, with safeguards against tipping-off.

Joining and leaving

• Joining: New members require the lead’s consent. If one entity in a business group joins, all related entities are automatically included.
• Leaving: If one member of a business group exits, the entire group exits. If the lead withdraws, all members must be notified and a new lead appointed within 28 days.

This means franchise splits or acquisitions can create immediate compliance consequences.

Practical guidance for real estate agencies

Step 1: Map your structure
Identify whether you are part of a franchise, network, or alliance that could form a reporting group.

Step 2: Assess suitability
Would a group Program reduce duplication, or would independence preserve flexibility?

Step 3: Identify a lead
Confirm eligibility and ensure it has resources to manage obligations.

Step 4: Update agreements
Franchise or alliance agreements should allocate authority, liability, and exit processes.

Step 5: Standardise workflows
Align onboarding and recordkeeping across offices. Ensure systems can support statutory deadlines.

Step 6: Train staff
Agents must understand AML basics, group rules, and reliance conditions.

Immediate next steps for real estate agencies

• Franchisors: engage with franchisees about group compliance.
• Independent agencies: explore election groups with peers.
• All agencies: draft a plain-English memo for staff explaining reporting groups, delayed CDD and reliance rules.
• Seek legal advice to align franchise or network agreements with AML/CTF obligations.
• Assess technology needs to support group-wide CDD and reporting.

Conclusion

Reporting groups are a core feature of the AML/CTF Rules 2025. For real estate agencies, they provide a pathway to consistency across networks, but also carry risks of shared liability and reduced autonomy.

The decision to form or join a reporting group should be based on structure, culture, and readiness. Mapping arrangements and aligning governance now will allow agencies to meet the July 2026 deadline without disruption.