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All reporting entities in designated sectors including lawyers, accountants, real estate agents, conveyancers, and trust and company service providers must have their AML/CTF programs in place by this date." } } ] }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.headstartdocs.com.au/" }, { "@type": "ListItem", "position": 2, "name": "Free Resources", "item": "https://www.headstartdocs.com.au/tranche-2-resources" }, { "@type": "ListItem", "position": 3, "name": "Law Practices and Tranche 2", "item": "https://www.headstartdocs.com.au/tranche-2-resources/law-practices-tranche-2" } ] }, { "@context": "https://schema.org", "@type": "Article", "headline": "Law Practices and Tranche 2", "description": "Specific information for legal practitioners on how AML/CTF Tranche 2 affects conveyancing and property settlements.", "datePublished": "2025-12-09", "dateModified": "2025-12-09", "url": "https://www.headstartdocs.com.au/tranche-2-resources/law-practices-tranche-2", "image": "https://www.headstartdocs.com.au/logo-512.png", "inLanguage": "en-AU", "isPartOf": { "@type": "WebSite", "name": "HeadStart Docs", "url": "https://www.headstartdocs.com.au" }, "about": { "@type": "Thing", "name": "AML/CTF Compliance", "description": "Anti-Money Laundering and Counter-Terrorism Financing compliance for Australian businesses under Tranche 2" }, "author": { "@type": "Organization", "name": "HeadStart Docs" }, "publisher": { "@type": "Organization", "name": "HeadStart Docs", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png" } } } ] --- [Get Started ](/checkout) We use cookies to enhance your experience and analyse traffic. [Privacy Policy](/privacy) Essential OnlyAccept All [Skip to main content](#main-content) [ ![HeadStart Docs](/assets/logo-dark-bg-CUivuKJ8.png)![HeadStart Docs](/assets/logo-light-bg-D5BRMGqf.png) ](/) [Home ](/) Features [Programs ](/programs) Resources Sectors [Log in ](/auth) [Portal](/aml-landing) ![Law practices and Tranche 2](/assets/adelaide-lawyer-BRfiVKYd.jpg) [Back to Free Resources](/tranche-2-resources) 1 December 2025 • Law Practices # Law practices and Tranche 2: What conveyancing lawyers need to know For law practices, particularly those conducting conveyancing and property settlements, Tranche 2 represents a fundamental shift in how client relationships are managed. Here's what you need to know. ## Which legal services are in scope? Not all legal services are designated services under the AML/CTF Act. The key is whether you're dealing with client money or property in specific ways. ### Services IN scope: - **Conveyancing and property settlements** - buying or selling real estate on behalf of clients - **Trust account activities** - managing client money in trust accounts - **Business sales** - facilitating the sale of a business - **Creating or managing trusts** - establishing trust structures or acting as trustee - **Company formation** - incorporating companies or managing corporate structures ### Services generally OUT of scope: - General legal advice (even if related to property matters) - Litigation and court representation - Will drafting and testamentary trust creation (but note: estate administration involving property or entity transfers may be caught) - Family law property settlements **pursuant to court orders** (but note: Binding Financial Agreements involving property or entity transfers are private contracts, not court orders, and may still be caught) - Employment law - Intellectual property matters The critical distinction is whether you're _transacting_ or merely _advising_. If you're handling client money or property, or facilitating transactions, you're likely providing a designated service. ## Conveyancing-specific obligations Property conveyancing is one of the most common designated services for law practices. Here's what you need to implement: **Note:** This article discusses conveyancing conducted by law practices. Conveyancing licensing and supervision requirements vary by state. In Queensland and the ACT, conveyancing must be conducted by or under the supervision of a legal practitioner or within a law practice. Other states have separate conveyancing licensing regimes. Confirm your specific obligations with your state's regulatory body. ### 1\. Purchaser verification Before acting for a property purchaser, you must verify their identity using acceptable documents or electronic verification. For individual purchasers: - Verify full name and date of birth (driver's licence, passport, etc.) - Verify residential address (utility bill, rates notice, etc.) - If purchasing through a company or trust, identify beneficial owners - Understand source of funds, particularly for cash purchases ### 2\. Vendor verification When acting for vendors, similar verification is required: - Verify identity of all registered proprietors - If vendor is a company or trust, verify beneficial ownership - Identify powers of attorney or authorised representatives - Document any unusual circumstances (e.g., property held for short period) ### 3\. Settlement procedures At settlement, additional AML/CTF controls are necessary: - Verify source of deposit and balance funds - Record details of all parties attending settlement - Document any cash components (triggering TTR if over $10,000) - Apply enhanced scrutiny to transactions involving high-risk jurisdictions ## Trust account management Trust accounts are a particular focus of AML/CTF obligations. Law practices must: ### Monitor for suspicious activity - Regular trust account reconciliations with AML/CTF lens - Scrutiny of third-party payments (not from/to the client directly) - Investigation of unusual payment patterns or structuring - Documentation of legitimate reasons for non-standard transactions ### Cash handling protocols While most law firms avoid cash, if you do accept it: - Any cash amount of $10,000 or more requires a Threshold Transaction Report - Multiple cash deposits below $10,000 that appear structured must trigger SMR - Maintain detailed cash receipting procedures - Consider implementing a policy against accepting large cash amounts ## Beneficial ownership challenges Identifying beneficial owners can be complex, particularly when clients are: ### Complex structures requiring enhanced diligence: #### Discretionary trusts You must identify the trustee (who has legal ownership) and settlor, plus any individuals with power to appoint or remove trustees, or who receive 25%+ of distributions. #### Corporate trustees If the trustee is a company, you must verify the company AND identify beneficial owners of the company (typically directors and shareholders with 25%+ interest). #### Self-managed super funds (SMSFs) The trustees/members are typically the beneficial owners. Verify all trustees and document the SMSF structure. #### Foreign entities Apply enhanced due diligence. Obtain certified documentation of foreign entity registration and beneficial ownership. Consider whether jurisdiction is high-risk. ## Suspicious matter indicators for conveyancing Law practices should be alert to red flags specific to property transactions: - **Unusual financing:** Significant cash components, or funds from unexpected sources or jurisdictions - **Nominee arrangements:** Unexplained use of nominees or powers of attorney - **Quick flips:** Property purchased and immediately resold without obvious improvements - **Price anomalies:** Purchase price significantly different from market value without explanation - **Client reluctance:** Resistance to providing identification or beneficial ownership information - **Third-party direction:** Excessive involvement of unknown third parties in client's decisions - **Complex structures:** Overly complicated ownership structures without clear business purpose - **Rushing:** Unreasonable pressure to complete quickly without legitimate business reason Remember: forming a suspicion doesn't mean you've proven wrongdoing. It means you have reasonable grounds to suspect based on the circumstances. When in doubt, document your assessment and consult your compliance officer. ## Interaction with professional obligations AML/CTF obligations complement (not replace) your existing professional duties as a lawyer: ### Client confidentiality - Submitting an SMR does NOT breach client confidentiality - the Act provides statutory protection - You can share AML/CTF information within your practice for compliance purposes - Legal professional privilege doesn't override AML/CTF reporting obligations ### Know Your Client - Many CDD requirements align with existing know-your-client practices - AML/CTF verification is more prescriptive about acceptable documents - Record keeping requirements are more specific and longer (7 years) ### Acting on instructions - You're not required to investigate or make findings about client's criminal activity - However, you must not knowingly facilitate illegal activity - If you form a suspicion, report it - AUSTRAC and law enforcement will investigate - After reporting, consider whether to continue acting (unless prohibited by AUSTRAC) ## Technology solutions Many law practices are implementing technology to streamline AML/CTF compliance: ### Electronic verification Electronic verification services (EVS) can verify customer identity against government databases: - **Benefits:** Fast, convenient, good client experience - **Limitations:** May not work for all customers; still need document copies as backup - **Providers:** greenID, Veda Advantage, others accredited by AUSTRAC ### Practice management integration Consider AML/CTF checklists and workflows in your practice management system: - Matter opening checklist including CDD requirements - Trust account alerts for suspicious patterns - Document management for verification records - Reporting workflows for SMRs ## Training your team All staff involved in conveyancing must understand their AML/CTF obligations: ### Key training topics for law practice staff: - **Fee earners/lawyers:** When CDD is required, how to identify suspicious matters, SMR process - **Paralegals/conveyancers:** Document verification procedures, record keeping, red flag recognition - **Receptionists/admin:** Initial client contact procedures, document collection, escalation process - **Accounts staff:** Trust account monitoring, cash handling (if applicable), TTR requirements - **Partners/principals:** Overall compliance responsibility, governance, independent review ## Cost considerations Law practices should budget for both upfront and ongoing compliance costs: ### Upfront costs: - Program development (can be reduced by using digital products like HeadStart Docs) - Legal review and customisation of program - Staff training (initial) - Technology setup (EVS, practice management modifications) ### Ongoing costs: - Compliance officer time - Electronic verification fees (typically $2-5 per verification) - Additional matter time for CDD procedures - Annual training refreshers - Biennial independent review While these costs are real, they're manageable and can be absorbed into normal fee structures. Many practices find that robust client verification also reduces other risks. ## Getting started Recommended steps for law practices preparing for Tranche 2: 1. **Scope review:** Determine exactly which services you provide that are designated services 2. **Risk assessment:** Conduct a preliminary assessment of your ML/TF/PF risks 3. **Gap analysis:** Compare current procedures against AML/CTF requirements 4. **Compliance officer:** Appoint someone with authority and knowledge 5. **Documentation:** Develop your AML/CTF program (consider using templates to save time and cost) 6. **Technology:** Implement electronic verification and practice management workflows 7. **Training:** Train all relevant staff before 1 July 2026 8. **Enrolment:** Complete AUSTRAC enrolment by 29 July 2026 (portal opens 31 March 2026) 9. **Testing:** Run through procedures with a few test matters before go-live 10. **Review:** Monitor effectiveness and refine as needed [ Read our complete Tranche 2 Guide Key dates, affected sectors, obligations and how to prepare ](/tranche-2) ### Law Practice Edition HeadStart Docs offers a Law Practice Edition specifically tailored to conveyancing and property settlement obligations, with trust account controls, beneficial ownership guides and conveyancing-specific workflows. [View Law Practice Pack](/programs) ### Related Articles [ Compliance Understanding AML/CTF Tranche 2 ](/tranche-2-resources/understanding-amlctf-tranche-2)[ Best Practices Building an effective AML/CTF program ](/tranche-2-resources/building-effective-amlctf-program) ### Free Compliance Tools [Implementation Timeline Key dates and milestones for Tranche 2 compliance ](/timeline)[Readiness Test Assess your compliance readiness in 2 minutes ](/risk-calculator)[Sanctions Screening Search Australian sanctions lists and country risk ](/sanctions-search) ### Ready to get compliant? Sector-specific compliance documents to help you build your AML/CTF program. [View Programs](/programs) ### Recommended Reading [ Law Practice Law Practices and Tranche 2 ](/tranche-2-resources/law-practices-tranche-2)[ Getting Started AUSTRAC Starter Kit for Lawyers ](/tranche-2-resources/austrac-starter-kit-lawyers)[ Implementation Working with Your Solicitor on AML/CTF ](/tranche-2-resources/working-with-solicitor)[ Law Practice Lawyers and Crypto Custody ](/tranche-2-resources/lawyers-crypto-custody)[ Reporting Tipping Off and Safe Harbour ](/tranche-2-resources/tipping-off-safe-harbor)[ Due Diligence Third-Party Reliance for KYC ](/tranche-2-resources/third-party-reliance-kyc)[ Law Practice AML/CTF: Not Just for Property Lawyers ](/tranche-2-resources/designated-services-not-just-property) ### Free Tools [Implementation Timeline Key dates and milestones for Tranche 2 compliance ](/timeline)[Readiness Test Assess your compliance readiness in 2 minutes ](/risk-calculator)[Sanctions Screening Search Australian sanctions lists and country risk ](/sanctions-search) ![HeadStart Docs](/assets/logo-dark-bg-CUivuKJ8.png)![HeadStart Docs](/assets/logo-light-bg-D5BRMGqf.png) [![HeadStart Counsel](/assets/headstart-counsel-logo-dark-DW8mV5rY.png)](https://www.headstartcounsel.com.au/)[![HeadStart Search](/assets/headstart-search-logo-dark-C68UhGXl.png)](/sanctions-search)![HeadStart Verify](/assets/headstart-verify-dark-Dtad3197.png) ### Sectors [Accounting](/accounting)[Business Brokers](/business-brokers)[Buyers Agent](/programs/buyers-agent-aml-program)[Conveyancing](/conveyancing)[Insolvency](/insolvency-practitioners)[Legal](/law-practice)[Nominee Director](/programs/nominee-director-aml-program)[Precious Metals, Stones & Products](/precious-metals)[Property Development](/property-developers)[Real Estate](/real-estate)[TCSPs](/tcsp)[Virtual Address](/virtual-address) ### Resources [Free Resources](/tranche-2-resources)[Decision Trees](/decision-trees)[Tranche 2 Guide](/tranche-2)[Podcast](/podcast)[Free Sector Reports](/sector-reports)[Implementation Timeline](/timeline)[Sanctions Search](/sanctions-search)[AUSTRAC Starter Kits](/tranche-2-resources/austrac-starter-program-kits)[Budgeting for Compliance](/tranche-2-resources/budgeting-amlctf-compliance) ### Programs [Portal + AML Programs](/programs)[Pricing](/pricing)[White Label](/white-label)[External CRMs](/integrations)[AML Portal](/aml-landing)[Plug & Play Technology](/plug-and-play)[Lawyer in the Loop](/features/lawyer-in-the-loop) ### Legal [Terms & Conditions](/terms)[Privacy](/privacy) ### Connect [Programs](/programs)[Podcast](/podcast)[Feedback](/report-problem)[Our Mission](/our-mission)[Partnerships](/partnerships) ### Events [AML Conference 2026](/conference) Powered by Stripe SSL Secured 2026 Ready © HeadStart Docs Pty Ltd (ABN 12 691 347 823). 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