AUSTRAC Notices for Real Estate Agents: Who Pays for the Response?
Imagine running a real estate agency with two offices, a busy listings calendar and a team of sales agents and property managers.
One Tuesday morning, the principal receives an email from AUSTRAC. It is a formal notice requesting documents about the agency’s business structure, the services it provides, how clients make payments and how transactions are managed.
What happens next?
Someone needs to locate the records, review the information, seek professional advice and prepare a response. Depending on what AUSTRAC identifies, there may also be further regulatory action and additional compliance costs.
This scenario is hypothetical, but the regulatory activity behind it is real.
Since August 2026, AUSTRAC has been issuing section 167 notices to businesses that appear to be providing regulated services without enrolling. Real estate agencies are among the sectors specifically identified.
For agency owners and directors, this raises an important question: if your business receives an AUSTRAC notice, who pays for the response, and could your insurance help?
Let’s look at what these notices mean, which real estate businesses may be affected and how Professional Indemnity and Management Liability Insurance may respond.
What is an AUSTRAC section 167 notice?
A section 167 notice is a formal request for information or documents under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
AUSTRAC uses this power to obtain information relevant to compliance with the legislation or the enforcement of offences under it.
The notice and its accompanying letter explain why it has been issued, the information required, the relevant legal authority and the consequences of failing to comply.
There are three important things real estate agencies should understand.
- Receiving a notice does not automatically mean you have breached the law.
A section 167 notice is an information-gathering tool. It does not, by itself, establish that a business has contravened the AML/CTF Act.
- Failing to comply can have serious consequences.
AUSTRAC has powers to take further regulatory action where businesses fail to meet their obligations.
- Seeking clarification is appropriate.
AUSTRAC encourages businesses to contact it if they need assistance understanding a notice or believe they may have difficulty complying.
The important distinction is that receiving a notice is not the same as receiving a penalty. However, it should be treated seriously and responded to appropriately.
Why are real estate agencies receiving AUSTRAC notices?
The AML/CTF reforms extended Australia’s anti-money laundering and counter-terrorism financing obligations to additional industries, including certain real estate services.
The new obligations commenced on 1 July 2026.
AUSTRAC began issuing section 167 notices on 28 August 2026 to businesses that appeared to be providing designated services without enrolling.
According to AUSTRAC, the notices were intended to help determine whether businesses were providing regulated services and meeting their legal obligations.
Real estate businesses were among the sectors targeted.
Key AUSTRAC dates for real estate businesses
| Date | What happened |
| 1 July 2026 | AML/CTF obligations commenced for newly regulated businesses providing designated services. |
| 29 July 2026 | The initial 28-day enrolment period ended for businesses providing designated services from 1 July. |
| 28 August 2026 | AUSTRAC confirmed it had begun issuing section 167 notices to apparently non-enrolled businesses. |
| 30 September 2026 | AUSTRAC announced that it had begun issuing infringement notices to businesses that failed to enrol. |
AUSTRAC has confirmed that enforcement action has already extended to businesses in the real estate, accounting and jewellery sectors.
The initial infringement notices were issued for $21,840 to corporate entities and $4,368 to individuals. These amounts can accrue daily.
This demonstrates that the regulator is actively monitoring compliance rather than simply introducing new requirements.
What information might AUSTRAC request from a real estate agency?
Real Estate Business reported in August 2026 that section 167 notices had been sent to individual real estate offices rather than entire networks.
The publication also reported on the types of information requested, based on documents it had reviewed.
We have not independently reviewed the notices, and the specific information required will depend on each notice.
Reported requests included:
| Information requested | What it may help establish |
| AUSTRAC enrolment records | Whether the agency has completed the required enrolment. |
| Business structure and services | Which entities operate within the agency and what services they provide. |
| Payment methods | How transactions are conducted and whether cash or virtual assets are involved. |
| Agency agreements and contracts of sale | Whether the agency is involved in brokering property transactions. |
| Cash handling policies | What controls exist when the business accepts cash. |
| Invoices, receipts and transaction records | Whether actual business practices align with documented procedures. |
The common theme is evidence.
It is not enough to have policies sitting in a folder. Businesses need to be able to demonstrate that the appropriate processes and controls are in place and being followed.
For most AML/CTF records, businesses must also comply with applicable seven-year record-keeping requirements.
Does the AML/CTF legislation apply to your real estate agency?
Not every business operating in the property sector automatically falls within the new AML/CTF requirements.
The obligations depend on the designated services being provided.
Under AUSTRAC’s guidance, real estate businesses are likely to be covered if they:
- Act as a buyer’s or seller’s agent, brokering the sale, purchase or transfer of real estate.
- Operate as a property developer or another business selling house and land packages, apartments off the plan or blocks of land in new subdivisions without engaging an independent real estate agent to broker the sale.
The definition of real estate also includes certain leasehold interests exceeding 30 years.
This distinction matters for agencies that operate across multiple areas of the property industry.
For example, an agency may generate substantial revenue through property management while also operating a sales division.
The fact that property management is not, by itself, one of the designated real estate services does not mean the entire agency is outside the regime. If the agency also brokers property sales, it may have AML/CTF obligations.
Businesses should assess the actual services they provide rather than relying solely on their business name, structure or primary source of revenue.
If you are unsure whether your business is captured, consult AUSTRAC’s guidance or seek independent legal advice.
The hidden costs of receiving an AUSTRAC notice
When a regulatory notice arrives, the financial impact can extend well beyond any potential penalty.
There are several costs agency owners should consider.
- Management time
Someone needs to coordinate the response, locate documents, communicate with advisers and ensure deadlines are met.
For smaller agencies, this responsibility often falls directly on the principal or director.
Time spent responding to a regulator is time taken away from running the business.
- Professional and legal advice
Responding to a regulatory notice can involve complex legal and compliance considerations.
Professional advice may be necessary to understand the request, review the available documentation and ensure the response is accurate.
Providing false or misleading information to AUSTRAC can itself be an offence, making appropriate professional assistance particularly important.
- Compliance gaps and remediation
A notice may reveal gaps between the agency’s documented policies and its actual business practices.
Depending on the circumstances, the business may need to review its processes, update systems, train staff or obtain further advice.
These activities can create additional operational and financial pressure.
- Regulatory penalties
AUSTRAC has a range of enforcement powers, including infringement notices, civil penalty proceedings, enforceable undertakings and remedial directions.
The initial infringement notices issued in September 2026 were:
- $21,840 for corporate entities.
- $4,368 for individuals.
These amounts can accrue daily, making ongoing non-compliance particularly costly.
The important consideration is that the cost of responding to a regulator can arise before any finding of wrongdoing has been made.
This brings us to another important question: could your existing insurance policies help?
Does Professional Indemnity or Management Liability Insurance cover AUSTRAC investigations?
Not all insurance policies respond to regulatory investigations in the same way.
Professional Indemnity Insurance and Management Liability Insurance are designed to address different types of business risks.
Understanding the distinction is important when reviewing your existing cover.
Professional Indemnity Insurance
Professional Indemnity Insurance is generally designed to protect professionals and businesses against claims arising from alleged negligence, errors or omissions in the provision of their professional services.
Some policies include extensions for regulatory investigations or inquiries, which may provide cover for certain legal defence or investigation costs.
However, this is not automatic.
Whether an AUSTRAC section 167 notice triggers cover will depend on the policy wording, including how it defines an investigation, inquiry or claim.
Fines and penalties are generally excluded, subject to the specific policy wording and applicable law.
Read more about Professional Indemnity Insurance.
Management Liability Insurance
Management Liability Insurance is designed to address certain exposures arising from the management and operation of a business, including claims involving directors and officers.
Depending on the policy, it may include cover for legal costs associated with certain regulatory investigations.
This can be particularly relevant where directors and officers face allegations relating to their management responsibilities or decisions.
However, not every regulatory notice automatically qualifies for cover. The definitions, extensions, limits and exclusions in the policy will determine whether a particular event is covered.
Fines and penalties may only be covered where legally insurable and not otherwise excluded.
Read more about Management Liability Insurance.
Professional Indemnity vs Management Liability: What’s the difference?
| Potential expense or exposure | Professional Indemnity | Management Liability |
| Legal costs relating to a regulatory investigation | May be covered if an appropriate extension applies. | May be covered, depending on the policy and investigation definition. |
| Fines and penalties | Generally excluded, subject to wording and applicable law. | Only where legally insurable and not otherwise excluded. |
| Compliance upgrades and staff retraining | Generally business expenses rather than insured losses. | Depends on the policy; should not be assumed to be covered. |
| Claims arising from professional negligence | Designed to respond to covered professional liability claims. | Generally not its primary purpose. |
| Claims against directors and officers | Generally not its primary purpose. | Designed to address certain management and director exposures. |
An important point: These are general descriptions, not guarantees of insurance cover.
Whether your policy responds to an AUSTRAC notice will depend on its specific wording, definitions, conditions, exclusions and applicable law.
Your broker should review the policy and confirm the position before you assume any costs are covered.
Five questions real estate agency owners should ask their insurance broker
With the new AML/CTF requirements in place, now is a good time to review your insurance arrangements.
If you own or manage a real estate agency, consider asking your broker the following questions:
- Does my policy include regulatory investigation cover?
Ask whether your Professional Indemnity or Management Liability policy includes an extension for regulatory investigations and what limits or sub-limits apply.
- Would an AUSTRAC section 167 notice trigger my policy?
Ask how your policy defines an investigation, inquiry or claim and whether a compulsory information request would meet that definition.
- What are my notification obligations?
Some policies require notification of certain circumstances, investigations or claims within specified timeframes. Understand when you need to notify your insurer or broker.
- Are fines and penalties covered?
Ask which fines and penalties are excluded and whether any are covered where legally insurable.
- Are directors and officers protected?
Consider whether your Management Liability policy provides appropriate protection for directors and officers facing allegations arising from their management responsibilities.
It is important to obtain clear answers based on your actual policy wording rather than relying on general descriptions of insurance cover.
Is your real estate agency prepared?
The introduction of the AML/CTF reforms represents a significant change for the Australian real estate industry.
With AUSTRAC already issuing information requests and infringement notices, businesses should be considering whether their obligations are understood, their records are accessible and their insurance arrangements reflect their current exposures.
Insurance cannot replace a proper AML/CTF compliance program, and it should never be relied upon as a substitute for meeting your legal obligations.
However, understanding where your existing policies may respond can help you identify potential financial exposure before an issue arises.
At Knightsbridge Insurance Group, we believe insurance should reflect the way your business actually operates.
When reviewing your insurance arrangements, our team can help you understand the differences between Professional Indemnity and Management Liability Insurance, identify relevant policy extensions and discuss whether your existing cover aligns with your business risks.
If you operate a real estate agency, speak with the Knightsbridge team about reviewing your current insurance arrangements.
Contact Knightsbridge Insurance Group
Disclaimer
Important Disclaimer: This article provides general information only and does not constitute legal, financial or compliance advice. AUSTRAC obligations, regulatory requirements and potential penalties depend on individual business circumstances and applicable legislation. Insurance coverage for regulatory investigations, legal costs, fines and penalties varies depending on the terms, conditions, limits and exclusions of individual policies. Professional Indemnity and Management Liability Insurance do not automatically cover all regulatory investigations or associated costs. Information regarding AUSTRAC requirements and enforcement activity reflects publicly available information at the time of writing and may change. Readers should seek independent legal or compliance advice regarding their obligations and consult a qualified insurance professional to review their coverage before making decisions. Knightsbridge Insurance Group holds Australian Financial Services Licence 514855.
Frequently Asked Questions
What is an AUSTRAC section 167 notice?
An AUSTRAC section 167 notice is a formal request for information or documents under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. AUSTRAC can issue these notices to people or businesses holding information relevant to compliance with the legislation or the enforcement of offences under it.
Are real estate agents receiving AUSTRAC notices?
Yes. AUSTRAC confirmed in August 2026 that it had begun issuing section 167 notices to businesses that appeared to provide designated services without enrolling. Real estate businesses were among the sectors identified.
Does every real estate agency need to enrol with AUSTRAC?
No. The obligations depend on whether the business provides designated services under the AML/CTF legislation. Businesses brokering the sale, purchase or transfer of real estate are among those likely to be covered. Agencies should assess their actual activities against AUSTRAC’s guidance.
Does Professional Indemnity Insurance cover an AUSTRAC investigation?
Some Professional Indemnity policies include regulatory investigation extensions that may cover certain legal or investigation costs. However, whether an AUSTRAC notice qualifies will depend on the policy wording, including its definitions, limits and exclusions.
Does Management Liability Insurance cover AUSTRAC fines?
Not automatically. Management Liability policies may cover certain legal costs associated with regulatory investigations. Fines and penalties are only potentially covered where legally insurable and not otherwise excluded by the policy.
What should I do if my real estate agency receives an AUSTRAC notice?
Read the notice and accompanying correspondence carefully, identify the information requested and note the applicable deadlines. Consider seeking qualified legal or compliance advice before responding. You should also contact your insurance broker promptly to establish whether your policy contains relevant notification requirements or potential cover.