How property can hold proceeds
Criminal proceeds can fund a property purchase, renovation or loan repayment. A later sale can give the money an apparent connection to an ordinary asset transaction.
AUSTRAC identifies risks involving hidden ownership, unclear funding and unexplained changes in sale instructions. These are reasons for examination, not findings about every property transaction.
Compare the buyer, payer and recipient
The person named on the contract may differ from the person supplying funds. The recipient of sale proceeds may also differ from the seller.
A useful review identifies these parties and the reason for each difference. A loan, gift or commercial arrangement may explain it.
A company or trust can be a legitimate owner. The relevant issue is whether the business can establish the required ownership and funding matters.
Source: AUSTRAC: Source of funds or wealth; Requests for complex arrangements.
- Buyer
The person acquiring the property.
- Payer
The person supplying the purchase funds.
- Recipient
The person receiving the sale proceeds.
Three parties to identify
These roles can involve different people. Record the relationship and supporting evidence before deciding the response.
Connected concepts. Lines do not show ownership or a reporting hierarchy.
A changed payment instruction
A fictional company buys a property. Shortly before settlement, its representative says another company will pay part of the price.
The agent records the payer and asks for the relationship and funding explanation through its approved process. It compares the answer with available documents.
A supported loan agreement may resolve one question. An unexplained payer or conflicting instruction may require escalation. The agent records the decision and reasons.
Source: AUSTRAC: Unusual transactions and requests; Requests for complex arrangements.
Apply the service duties separately
The real estate sector article describes who provides a designated service. The source-of-funds article describes that separate evidence question.
An unexplained pattern does not automatically require an SMR. The business applies the reasonable-grounds test and the relevant reporting deadline.