> ## Documentation Index
> Fetch the complete documentation index at: https://docs.frankieone.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Real Estate - Customer Onboarding

> KYC Real Estate Use Case: Risk-Based Customer Verification

## Overview

This guide covers FrankieOne's KYC solution for real estate professionals, designed to support identity verification obligations for real estate agents, conveyancers, and property transaction participants under current and upcoming AML/CTF requirements.

***

## Summary

### Available Workflows

| Workflow | Purpose | When to Use |
| - | - | - |
| `AUS-Basic3V-TwoPlusID` | Individual verification | Buyers, sellers (individuals) |
| `AUS-Business-KYB` | Entity verification | Companies, trusts, partnerships |
| `AUS-PEP-Sanctions-Media` | Enhanced screening | High-value, higher-risk transactions |

### Verification by Party Type

| Party | Workflow | Timing |
| - | - | - |
| Individual Seller | `AUS-Basic3V-TwoPlusID` | Listing agreement |
| Individual Buyer | `AUS-Basic3V-TwoPlusID` | Offer/contract |
| Company/Trust Seller | `AUS-Business-KYB` + individual verification | Listing agreement |
| Company/Trust Buyer | `AUS-Business-KYB` + UBO verification | Offer/contract |
| Foreign Purchaser | Enhanced verification + FIRB check | Offer/contract |

### Risk-Based Approach

```mermaid theme={null}
flowchart TD
    A["Property Transaction"] --> B{Transaction Risk Assessment}
    B -->|Low Risk| C["Standard CDD"]
    B -->|Medium Risk| D["Enhanced CDD + Screening"]
    B -->|High Risk| E["Enhanced CDD + Source of Funds + Senior Approval"]
    C --> F["Proceed"]
    D --> F
    E --> G["Manual Review"]
    G --> F
```

### Risk Factors

| Factor | Lower Risk | Higher Risk |
| - | - | - |
| Transaction value | Under \$1M | Over \$5M |
| Property type | Residential | Commercial, development |
| Buyer type | Australian individual | Foreign entity, complex structure |
| Payment method | Bank transfer (domestic) | Cash, offshore funds, crypto |
| PEP/sanctions | Clear | Matches or near-matches |

### Verification Checklists

**Individual:**

* Full legal name ✓
* Date of birth ✓
* Residential address ✓
* Government ID ✓
* PEP/sanctions screening ✓

**Entity:**

* Entity name and registration ✓
* Directors/trustees ✓
* Beneficial owners over 25% ✓
* Each UBO verified ✓
* PEP/sanctions screening (all) ✓

### Support

* **Documentation**: [docs.frankieone.com](https://docs.frankieone.com)
* **Support**: Contact your FrankieOne representative

***

## Expanded Details

### Regulatory Context

> **Disclaimer:** The information in this section is provided for general guidance only and does not constitute legal or compliance advice. Customers must seek independent legal and regulatory advice to ensure their implementation meets their specific regulatory obligations. FrankieOne is not responsible for customers' compliance decisions or outcomes.

> **Regulatory Updates:** The Australian Government is implementing AML/CTF Tranche 2 reforms that will bring real estate professionals under AUSTRAC reporting obligations. Customers should monitor updates from AUSTRAC and prepare for compliance requirements.

#### AML/CTF Tranche 2 - Real Estate

Real estate has been identified as a high-risk sector for money laundering. Tranche 2 reforms will extend AML/CTF obligations to:

| Covered Entity | Expected Obligations |
| - | - |
| **Real Estate Agents** | Customer identification, suspicious matter reporting, AML/CTF program |
| **Conveyancers** | Customer identification, transaction monitoring, reporting |
| **Property Developers** | Customer due diligence for off-plan sales |
| **Settlement Agents** | Customer identification, fund source verification |

#### Expected Obligations Under Tranche 2

| Obligation | Requirement | How FrankieOne Can Support |
| - | - | - |
| **Customer Identification** | Verify identity of buyers, sellers, and beneficial owners | Automated identity verification workflows |
| **Beneficial Ownership** | Identify and verify beneficial owners of entities | Business verification and UBO identification |
| **Ongoing CDD** | Risk-based ongoing customer due diligence | Screening refresh and re-verification (where configured) |
| **AML/CTF Program** | Establish and maintain compliant program | Configurable risk rules aligned to your program |
| **Suspicious Matter Reporting** | Report suspicious matters to AUSTRAC | Audit trails and exportable verification data |
| **Record Keeping** | Maintain verification records for 7 years | Secure record retention |

#### Current Industry Obligations

Even before Tranche 2, real estate professionals have verification obligations:

| Source | Requirement |
| - | - |
| **Real Estate Institute Codes** | Client identification best practices |
| **State Licensing Requirements** | Varies by jurisdiction |
| **Anti-Money Laundering Guidance** | Industry guidance on suspicious transactions |
| **Foreign Investment (FIRB)** | Foreign purchaser identification |

***

### Workflow Configuration Details

#### Individual Verification: `AUS-Basic3V-TwoPlusID`

Standard identity verification for individual buyers and sellers.

**Core Checks:**

| Check Type | Purpose |
| - | - |
| Government ID verification (DVS) | Primary identity confirmation |
| Credit bureau check | Identity cross-reference |
| Electoral roll | Address verification |
| PEP and sanctions screening | AML risk assessment |

#### Business Verification: `AUS-Business-KYB`

Verification for companies, trusts, and other entities involved in property transactions.

**Entity Verification Components:**

| Component | Description |
| - | - |
| Entity existence | ASIC/ABR verification |
| Entity details | Name, registration, status |
| Directors/officeholders | Identification of key persons |
| Beneficial owners | Individuals with over 25% ownership/control |
| Trust structures | Trustee and beneficiary identification |

#### Enhanced Screening: `AUS-PEP-Sanctions-Media`

Enhanced screening for higher-risk transactions.

**Screening Components:**

| Check | Description |
| - | - |
| PEP screening | Politically Exposed Persons (Levels 1-4) |
| Sanctions screening | DFAT, UN, OFAC, EU lists |
| Adverse media | Negative news screening |
| Watchlists | Law enforcement lists |

***

### Step-by-Step Implementation

> **Note:** This section describes the conceptual implementation flow. For actual API endpoints and schemas, refer to the [FrankieOne API Documentation](https://docs.frankieone.com).

#### Seller Verification Flow

```mermaid theme={null}
flowchart LR
    A["Listing Enquiry"] --> B["Verify Seller Identity"]
    B --> C["Verify Authority to Sell"]
    C --> D["Screening Check"]
    D --> E["Risk Assessment"]
    E --> F["Proceed with Listing"]
```

**Step 1: Verify Seller Identity**

For individual sellers:

* Full legal name
* Date of birth
* Residential address
* Government ID verification

For entity sellers:

* Entity verification (company/trust)
* Director/trustee identification
* Beneficial owner verification
* Authority to sell

**Step 2: Verify Authority to Sell**

| Scenario | Verification Required |
| - | - |
| Sole owner | Title search confirmation |
| Joint owners | All owners verified |
| Company owner | Director authority, company verification |
| Trust owner | Trustee authority, trust verification |
| Deceased estate | Executor verification, probate |
| Power of Attorney | POA document, attorney verification |

#### Buyer Verification Flow

```mermaid theme={null}
flowchart LR
    A["Offer Received"] --> B["Verify Buyer Identity"]
    B --> C["Entity/UBO Check"]
    C --> D["Screening Check"]
    D --> E["Source of Funds"]
    E --> F["Risk Assessment"]
    F --> G["Proceed to Contract"]
```

**Step 1: Verify Buyer Identity**

For individual buyers:

* Full legal name
* Date of birth
* Residential address
* Government ID verification

For entity buyers:

* Entity verification
* Beneficial owner identification
* All UBOs with over 25% ownership verified

**Step 2: Beneficial Ownership Verification**

```mermaid theme={null}
flowchart TD
    A["Entity Buyer"] --> B["Identify Entity Type"]
    B --> C{Entity Type}
    C -->|Company| D["ASIC Extract<br/>Directors + Shareholders"]
    C -->|Trust| E["Trust Deed<br/>Trustee + Beneficiaries"]
    C -->|Partnership| F["Partnership Agreement<br/>Partners"]
    D --> G["Identify UBOs over 25%"]
    E --> G
    F --> G
    G --> H["Verify Each UBO"]
    H --> I["Complete"]
```

**Step 3: Foreign Purchaser Verification**

| Requirement | Verification |
| - | - |
| FIRB approval | Confirm approval obtained |
| Passport verification | Foreign passport + visa if applicable |
| Overseas address | Address verification or document |
| Source of funds | May require enhanced due diligence |

***

### Risk Tier Examples

#### Tier 1: Low Risk - Standard CDD

**Transaction Profile:**

* Australian individual seller
* Australian individual buyer
* Residential property \$650,000
* Bank transfer from domestic account

```mermaid theme={null}
flowchart LR
    A["Transaction"] --> B["Seller ID ✓"]
    B --> C["Buyer ID ✓"]
    C --> D["Screening: Clear"]
    D --> E["Risk: Low"]
    E --> F["Standard CDD Complete"]
```

**Example Scenario:**

> James Testone sells his Sydney apartment to Mary Testtwo for \$650,000. Both are Australian citizens with verified identities. Standard CDD completed. Funds transferred from Mary's domestic bank account. Transaction proceeds.

#### Tier 2: Medium Risk - Enhanced CDD

**Transaction Profile:**

* Company seller (investment property)
* Foreign individual buyer
* Property value \$1.8M
* FIRB approval required

```mermaid theme={null}
flowchart TD
    A["Transaction"] --> B["Company Verification"]
    B --> C["Director ID ✓"]
    C --> D["Foreign Buyer ID"]
    D --> E["FIRB Check"]
    E --> F["Enhanced Screening"]
    F --> G["Risk: Medium"]
    G --> H["Enhanced CDD Complete"]
```

**Example Scenario:**

> TestCorp Pty Ltd (verified company, directors identified) sells Melbourne property to Hans Testthree, a German national with FIRB approval. Enhanced due diligence performed: foreign passport verified, FIRB approval confirmed, PEP/sanctions screening clear. Transaction proceeds with enhanced documentation.

#### Tier 3: High Risk - Senior Approval Required

**Transaction Profile:**

* Complex trust structure seller
* Offshore company buyer
* High-value commercial property \$12M
* PEP Level 3 identified in ownership structure

```mermaid theme={null}
flowchart TD
    A["Transaction"] --> B["Trust Verification"]
    B --> C["Multiple Beneficiaries"]
    C --> D["Offshore Company Buyer"]
    D --> E["UBO Verification"]
    E --> F["PEP L3 Identified"]
    F --> G["Enhanced Screening"]
    G --> H["Source of Funds Review"]
    H --> I["Senior Approval Required"]
    I --> J["Risk: High - Manual Review"]
```

**Example Scenario:**

> A family trust sells commercial property to an offshore company. Trust has 5 beneficiaries requiring verification. Buyer's UBO structure reveals a PEP Level 3 (family member of political figure). Enhanced due diligence required: all beneficiaries verified, offshore company structure documented, source of funds investigated. Senior management approval required before proceeding.

***

### Edge Cases and Special Handling

#### Complex Ownership Structures

| Structure | Verification Approach |
| - | - |
| **Discretionary Trust** | Trustee + appointor + beneficiary classes |
| **Unit Trust** | Trustee + unit holders over 25% |
| **SMSF** | Corporate trustee/individual trustees + members |
| **Foreign Trust** | Equivalent to Australian requirements |
| **Multi-layered Structures** | Verify through to ultimate beneficial owners |

#### Authorised Representatives

| Scenario | Verification Required |
| - | - |
| Power of Attorney | POA document verification, attorney ID |
| Company representative | Authority confirmation, representative ID |
| Solicitor acting | Law society verification, solicitor ID |
| Buyer's agent | Authority letter, agent ID |

#### Deceased Estates

| Document | Purpose |
| - | - |
| Death certificate | Confirm death |
| Probate/Letters of Administration | Authority to sell |
| Executor ID verification | Identity of authorised person |

#### Property-Specific Considerations

| Property Type | Additional Considerations |
| - | - |
| Off-the-plan | Developer verification, sunset clauses |
| Auction | Time-sensitive verification |
| Commercial | Higher value thresholds, tenant verification |
| Rural/agricultural | Water rights, foreign ownership restrictions |

***

### Beneficial Ownership

#### Identifying Beneficial Owners

Under expected Tranche 2 requirements, beneficial owners are individuals who:

* Own over 25% of the entity (directly or indirectly)
* Control over 25% of voting rights
* Exercise significant control over the entity

**Verification Requirements:**

| UBO Category | Verification |
| - | - |
| Direct shareholders over 25% | Standard individual verification |
| Indirect owners over 25% | Trace through to individual, verify |
| Controlling persons | Verify identity, document control |
| Trust beneficiaries | Named beneficiaries or classes |

#### Common Entity Structures

```mermaid theme={null}
flowchart TD
    A["Property Purchase by Entity"] --> B{Entity Type}
    B --> C["Pty Ltd Company"]
    B --> D["Family Trust"]
    B --> E["SMSF"]
    B --> F["Partnership"]

    C --> G["Verify: Directors, Shareholders over 25%"]
    D --> H["Verify: Trustee, Appointor, Beneficiaries"]
    E --> I["Verify: Trustees, Members"]
    F --> J["Verify: All Partners"]

    G --> K["Identify & Verify UBOs"]
    H --> K
    I --> K
    J --> K
```

***

### Compliance Reporting

#### Record Keeping Requirements

Under expected Tranche 2 requirements, records must be kept for 7 years.

**Records to Maintain:**

| Record Type | Details |
| - | - |
| Customer identification | Verification records, documents collected |
| Transaction records | Property details, values, parties |
| Risk assessments | Risk rating, rationale |
| Screening results | PEP/sanctions checks |
| Suspicious matter reports | Internal records (reports filed with AUSTRAC) |

#### Suspicious Matter Indicators

Real estate professionals should be alert to:

| Indicator | Example |
| - | - |
| Unusual payment arrangements | Cash deposits, third-party payments |
| Price anomalies | Significantly above/below market value |
| Rapid transactions | Quick buy/sell sequences |
| Reluctance to provide information | Avoiding verification |
| Complex structures | Unnecessarily complex ownership |
| High-risk jurisdictions | Funds or parties from high-risk countries |

***

### Troubleshooting

| Issue | Likely Cause | Resolution |
| - | - | - |
| Entity verification failing | Incorrect ABN/ACN | Verify registration details |
| UBO identification incomplete | Complex trust structure | Request trust deed, trace ownership |
| Foreign passport verification | Document not supported | Request alternative ID or document verification |
| FIRB approval not confirmed | Timing issue | Confirm with buyer's solicitor |


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