Aspects of the services offered by the real estate industry have been identified as being attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

Why does real estate have AML/CFT obligations?

Real estate can be an attractive channel for criminals wishing to launder illicit funds.

Criminals can purchase a property using illicit funds, live in the property purchased with illicit funds, renovate the property (using illicit funds) to improve its value and sell the property later for a capital gain.

The ultimate beneficial ownership of real estate can also be easily concealed, making it an attractive asset class for criminals.

What are the ML/TF risks faced by the real estate industry?

The Money Laundering and Terrorist Financing (ML/TF) risks associated with the real estate sector include:

  • The use of third parties to buy and sell properties
  • The use of loans and mortgage (for example, criminals take out a mortgage to buy a property and pay back the mortgage using lump sum cash payments)
  • Manipulating property values (that is, criminals buy and sell real estate at a price above or below market value)
  • Structuring cash deposits to buy real estate
  • The use of complex company structures and multiple accounts to disguise the real purpose of a property transaction and disguise its true ownership
  • Buying and leasing properties, but providing the tenant with illicit funds to pay the rents
  • Buying a property using illicit funds with the intention of conducting further criminal activity at the property
  • Using illicit funds to renovate properties

Businesses within the real estate industry captured by the AML/CFT obligations must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures. This is a critical first step in complying with AML/CFT laws.

What services are covered by AML/CFT obligations?

These are the services offered by the real estate industry that are covered by AML/CFT obligations:

  • Managing client funds (other than sums paid as fees for professional services), accounts, securities, or other assets
  • Engaging in or giving instructions on behalf of a customer to another person for any conveyancing to affect the grant, sale, or purchase or any other disposal or acquisition of real estate or an interest in land
  • The transfer of a beneficial interest in land or other real property

If you offer or provide one or more of the above services, your business will be subject to AML/CFT obligations.

What is a risk-based AML/CFT regime?

The AML/CFT regime is risk-based, which means that your responses to the AML/CFT obligations placed upon you should be risk-based. 

A risk-based AML/CFT regime requires that you understand and address the Money Laundering and Terrorism Financing (ML/TF) risks associated with the services you offer.

You must then design, implement and maintain systems, procedures and controls that are proportionate to your ML/TF risks.

How can Initialism help?

Initialism are the AML/CFT experts, so you don’t have to be.

With over 30 years of expert knowledge and real world experience our AML/CFT compliance solutions will to help you navigate your legal and regulatory requirements so that your business complies with its AML/CFT obligations in the fastest and most cost-effective way.

Initialism has a range of AML/CFT solutions to support becoming AML/CFT compliant and maintaining compliance:

Our solutions allow you to tailor support based on your capacity, experience and budget.

AML/CFT compliance solutions for the
real estate industry

From self-guided to fully dedicated support, our AML/CFT compliance solutions for the real estate industry draw on unparalleled expertise, knowledge and real-world experience. Click below to discover which AML/CFT compliance solution is right for your real estate business.
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*$NZD excl. GST

UNSURE OF THE BEST SOLUTION FOR YOUR BUSINESS?

Why choose Initialism?

UNPARALELLED EXPERTISE

Our expertise covers all AML/CFT disciplines and brings unique perspectives, approaches and solutions to the AML/CFT challenges faced by the real estate industry

IN-DEPTH INDUSTRY KNOWLEDGE

Our AML/CFT compliance knowledge includes working with real estate businesses and we understand what compliance means for your business

REAL WORLD PERSPECTIVES

We have experience in delivering workable AML/CFT compliance to the real estate industry

OVER 30 YEARS EXPERIENCE

Our knowledge and expertise has been hard earned and comes from working in the area of AML/CFT for many decades

SOLUTIONS THAT WORK

We have experience providing tried and tested AML/CFT solutions, regardless of the size and complexity of your real estate business

TAILORED FOR YOUR BUSINESS

Our AML/CFT compliance solutions are flexible and can be tailored to your capacity, experience and budget

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NEED OTHER AML/CFT COMPLIANCE SERVICES?

Together with our AML/CFT compliance solutions we offer a range of additional services to help New Zealand real estate businesses including AML/CFT Independent Audit and AML/CFT Training.