Key Takeaways

In this guide

Why auctions are treated differently The AUSTRAC rule for real estate delayed CDD How the 28-day / 3-days-before-settlement rule works What parts of CDD you can delay Delayed CDD is not an excuse Do you need CDD on every bidder? How AMLTranche tracks the timer

Why auctions are treated differently

AUSTRAC's delayed initial CDD guidance states:

"When real estate is sold at auction, it's possible for a buyer to only be known after the fall of the hammer. You can delay initial customer due diligence (CDD) where completing initial CDD would disrupt the ordinary course of business…"

In other words: AUSTRAC accepts that at auction you don't know who the buyer will be until the hammer falls. Forcing CDD before the auction would mean CDD on every registered bidder, which is disproportionate and commercially unworkable.

The AUSTRAC rule for real estate delayed CDD

AUSTRAC's delayed initial CDD guidance contains a real-estate-specific rule:

"If you're brokering the sale, purchase or transfer of real estate — for example, as a real estate agent — you may delay completing initial CDD on the party you aren't acting for. You may complete initial CDD on the buyer/transferee 28 days after the exchange of contracts, or at least 3 days before the initially agreed day for settlement (whichever is earliest)."

This rule applies equally to:

How the 28-day / 3-days-before-settlement rule works

It's a "whichever is earliest" calculation. Two deadlines run in parallel, and you must finish initial CDD by whichever one comes first.

Worked example: 6-week settlement

Worked example: 30-day settlement

For very short settlements, the 3-days-before-settlement rule typically binds. For long settlements (off-the-plan, complex contracts), the 28-days-after-exchange rule typically binds.

What parts of CDD you can delay

AUSTRAC's guidance allows you to delay verification of specific KYC information where appropriate. You must still collect the information from the customer through your onboarding process. Matters you may be able to delay verification of include:

You collect the same information from the customer as you ordinarily would through your onboarding form. You identify the ML/TF risk based on the information collected. You then verify as soon as reasonably practicable, within the applicable timeframe.

Delayed CDD is not an excuse to put CDD off

AUSTRAC is explicit on this

"It isn't a sufficient reason to delay initial CDD because it would be inconvenient for you or the customer to do it before you provide the designated service." — AUSTRAC delayed initial CDD guidance

Practical translation: the auction delay exists because it's impossible to CDD a buyer who hasn't been identified yet. It does not apply to cases where CDD could be done in advance but wasn't. AUSTRAC also requires your AML/CTF policies to describe:

Do you need CDD on every registered bidder?

No. You provide a designated service to the buyer — the successful purchaser — not to every registered bidder.

Per AUSTRAC guidance, CDD is required on each person to whom you provide a designated service. At auction:

For the seller side, CDD on the vendor can and should be completed before the auction campaign begins — there's no auction-related reason to delay CDD on the vendor.

How AMLTranche tracks the auction and exchange timer

For real estate files, AMLTranche tracks both the 28-day-after-exchange and 3-days-before-settlement dates automatically. When exchange of contracts is logged, the platform:

Build AUSTRAC-ready compliance in under an hour

AMLTranche generates your AML/CTF program, runs CDD and sanctions screening, and keeps 7-year audit records automatically. Built for Australian property professionals and dealers in precious metals.

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Frequently asked questions

When does AUSTRAC permit delayed CDD at auction?

AUSTRAC permits delayed CDD for real estate where completing initial CDD before the fall of the hammer would disrupt the ordinary course of business. Delayed CDD is not permitted just because it's inconvenient.

How long do I have to complete CDD after an auction?

Per AUSTRAC's delayed initial CDD guidance for real estate: 28 days after the exchange of contracts, or at least 3 days before the initially agreed day for settlement — whichever is earliest.

What if the settlement date is less than 28 days after exchange?

Then the 3-days-before-settlement rule binds. For example, if exchange is 1 May and settlement is 15 May, you must complete CDD by 12 May (3 days before settlement), not 29 May.

Do I need CDD on every bidder at an auction?

No. You provide a designated service to the buyer (successful purchaser), not to every registered bidder. CDD is required only on the buyer, within the delayed CDD timeframe.

Can conveyancers use the same delayed CDD rule?

AUSTRAC's guidance extends the real-estate delayed CDD rule to legal practitioners and conveyancers assisting a client who is the buyer of real estate — same 28-days-after-exchange or 3-days-before-settlement rule.

Can I delay CDD on the seller too?

No. There is no auction-related reason to delay CDD on the seller/vendor. CDD on the vendor should be completed before the auction campaign begins.

Disclaimer: This article provides general information sourced from AUSTRAC's published guidance and the AML/CTF Act 2006. It does not constitute legal advice. Confirm your specific obligations with AUSTRAC or a qualified legal adviser.