Commercial leasing is recognised as an area of ML/TF risk and is therefore captured. Persons engaged in work to negotiate and transact a commercial lease are providing real estate agency work. These persons are subject to the full range of AML/CFT obligations as a reporting entity under the AML/CFT Act.

There are a few key differences for commercial leasing transactions compared to other real estate agency work regarding the timing of customer due diligence (CDD). In normal circumstances, CDD must be conducted:

• once there is a fully signed agency agreement and before carrying out any further real estate agency work for the customer.

However, for commercial leasing transactions, CDD is required:

• before the real estate agent presents a lease agreement to the landlord:
• in relation to assignment to lease transactions, before the real estate agent presents an assignment of lease to the assignee:
• in relation to a sublease transaction, before the real estate agent presents a sublease agreement to the outgoing tenant:

The different timings of CDD recognise that for commercial leasing, multiple agents may advertise a premise, but not all will present an offer to lease or sublease from a prospective commercial tenant. Requiring CDD to be conducted before the offer to lease or sublease is presented ensures that ML/TF risk is mitigated before a transaction can be completed.