What is customer due diligence (CDD) for a property agent?

CDD is the set of checks an estate agent and salesperson must run on their own client under the Estate Agents (PMLPFTF) Regulations 2021: assess the client's money-laundering, proliferation-financing and terrorism-financing risk; obtain and verify identity; find out whether the client acts for someone else and identify any beneficial owner; determine PEP status; and screen against sanctions lists. It must be done before the client signs any agreement to buy, sell or lease the property, such as the OTP, and enhanced checks apply where the risk is higher. If CDD cannot be completed, the salesperson must not proceed with the transaction.

When does an agent file a Suspicious Transaction Report (STR)?

When there are reasonable grounds to suspect that funds or a transaction are linked to criminal conduct, money laundering, proliferation financing or terrorism financing — even if the deal does not ultimately proceed. The salesperson who forms the suspicion must file, on the police's SONAR portal, and stays primarily responsible. Once the agency's designated officer has been told, the agency must also file unless the salesperson already has (Estate Agents (PMLPFTF) Regulations 2021, regs 11(4)–(4A) and 12G(4)–(5), from 1 Jul 2025). Never tip off the client.

Must I do due diligence on the other party if they have no agent?

Yes. Under the revised PMLPFTF Regulations, estate agents and salespersons must conduct Unrepresented Counterparty Due Diligence (UCPDD) on the other side of a sale or lease where that party is not represented by an agent — the same identity, beneficial-owner, PEP, sanctions-screening and risk-assessment checks you do for a client. Carry them out once it is clear the deal is likely to proceed, but before the parties enter into any agreement. Ongoing monitoring is the one duty that does not extend to an unrepresented counterparty.

Do the AML checks apply to HDB rental transactions?

HDB residential rentals — whole flat or room — have been exempt from CDD and UCPDD since 1 July 2025, because of their lower risk profile. The exemption does not cover anything else: all sales and purchases, and all non-HDB rentals, still require both. And it never removes the duty to file a Suspicious Transaction Report if something suspicious surfaces during the work.

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Paper 2 · Anti-Money Laundering (PMLPFTF) · 15 min read

AML/CFT for Property Agents: CDD, Source of Funds & STR

Practise this section (167 questions) → · 3.4 Prevention of Money Laundering, Proliferation Financing and Terrorism Financing (PMLPFTF) obligations, in sets of about 30

Must-know for the exam

Customer Due Diligence (CDD) means verifying the customer's identity and beneficial owner, assessing ML/PF/TF risk before the client signs any agreement, then ongoing monitoring; source of funds is an EDD step.
A beneficial owner is always an individual and there is no percentage test: look to controlling ownership, then control by other means, then senior management (reg 5(4)).
EDD applies to foreign PEPs and their family and close associates, FATF-called countries and higher-risk work; it adds source of wealth and funds and a designated officer's approval.
Source of funds is the origin of the money for this deal, traced to the activity that generated it; source of wealth is how the client built his whole wealth.
On knowledge or reasonable grounds to suspect, an STR goes to the STRO as soon as reasonably practicable, even if the deal does not proceed; not reporting is a CDSA offence.
The salesperson with reason to suspect must file on SONAR and stays primarily responsible; once the agency's designated officer is told, the agency must file unless already done.
Tipping off (CDSA s 57) is disclosing anything likely to prejudice an investigation, actual, imminent or following a report: up to $250,000, 3 years, or both.
If CDD cannot be completed, the salesperson must not carry out the transaction, must inform the agency and must decide whether to file an STR (reg 12).
Keep CDD and transaction records at least 5 years after the work is completed; training, risk-assessment and audit records 5 years after they are made (reg 14).
From 1 Jul 2025, UCPDD applies the client checks (not ongoing monitoring) to an unrepresented counterparty before any agreement, and AML penalties are counted per breach.

On this page · 12 sections

Property is a classic money-laundering vehicle, so estate agents are gatekeepers with legal duties — under the CDSA (Corruption, Drug Trafficking and Other Serious Crimes Act), the Terrorism (Suppression of Financing) Act (TSOFA), and CEA's Estate Agents (Prevention of Money Laundering, Proliferation Financing and Terrorism Financing) Regulations 2021 — the PMLPFTF Regulations. The exam expects the mechanics, not just awareness.

Recent change · from 1 Jul 2025

Amended AML regulations for estate agents took effect on 1 Jul 2025, with full compliance for transactions from 1 Jan 2026 (CEA). This lesson follows the amended rules; see "The 2025 overhaul" below.

Swipe sideways to see all of it.

The AML reflex: red flag → CDD/EDD → if still suspicious, STR to the STRO (never tip off).

The core steps

Customer Due Diligence (CDD) — identify and verify the customer's identity before acting.
Identify the beneficial owner — the real natural person behind a company, trust or nominee.
Understand the purpose of the transaction; where EDD applies, also establish the source of funds and source of wealth (reg 6(3)(b)).
Ongoing monitoring of the business relationship.
Keep records for at least 5 years after the work is completed.

CDD vs Enhanced Due Diligence (EDD)

	Standard CDD	Enhanced DD (EDD)
When	Normal-risk clients	Higher risk: foreign PEPs and their family members and close associates, people from FATF-called countries, complex or unusually large transactions, or suspected ML/PF/TF (reg 6(2))
Depth	Verify ID + beneficial owner	Add income, source of wealth and source of funds, and a designated officer's approval before starting or continuing the relationship (reg 6(3))
PEPs	A domestic PEP gets EDD only where the risk assessment finds higher risk	A foreign PEP triggers EDD automatically

The approach is risk-based: more scrutiny for higher-risk clients and transactions, proportionately less for clearly low-risk ones. A low rating lightens the depth of the checks; it never removes the core ones. Sanctions screening is not risk-based: screen every client and unrepresented counterparty against the TSOFA First Schedule and UN sanctions lists, and on a match stop acting and file an STR. The one exemption is the rental of an HDB flat wholly for residential use (regs 7(2), 12E(2)), where the STR duty still applies. An agency holds no transaction money, so there is nothing for it to freeze.

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Quick self-check · 5 questions

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By when must CDD on a client be completed?Show answer
Before the client enters any agreement to acquire or dispose of the property, such as the OTP or tenancy agreement, or earlier if you suspect ML/PF/TF (reg 4).
Does a domestic PEP automatically trigger enhanced due diligence?Show answer
No. A foreign PEP, and his family members and close associates, trigger EDD automatically. A domestic PEP gets EDD only where the risk assessment finds higher risk.
A client refuses to produce documents and CDD cannot be completed. What must the salesperson do?Show answer
Stop: carry out no transaction, inform the agency, and decide whether to file an STR (reg 12). Carrying on and filing an STR later is wrong.
How long must CDD records and transaction documents be kept?Show answer
At least 5 years after the estate agency work is completed. Training records, risk assessments and STR-related records are kept at least 5 years after the record is made.
Since 1 Jul 2025, which rentals need no CDD or UCPDD, and does the STR duty still apply?Show answer
HDB residential rentals, whole flat or room. All sales and non-HDB rentals still need both. The STR duty is never exempt, so suspicion in an HDB rental must still be reported.

Common questions

What is customer due diligence (CDD) for a property agent?: CDD is the set of checks an estate agent and salesperson must run on their own client under the Estate Agents (PMLPFTF) Regulations 2021: assess the client's money-laundering, proliferation-financing and terrorism-financing risk; obtain and verify identity; find out whether the client acts for someone else and identify any beneficial owner; determine PEP status; and screen against sanctions lists. It must be done before the client signs any agreement to buy, sell or lease the property, such as the OTP, and enhanced checks apply where the risk is higher. If CDD cannot be completed, the salesperson must not proceed with the transaction.
When does an agent file a Suspicious Transaction Report (STR)?: When there are reasonable grounds to suspect that funds or a transaction are linked to criminal conduct, money laundering, proliferation financing or terrorism financing — even if the deal does not ultimately proceed. The salesperson who forms the suspicion must file, on the police's SONAR portal, and stays primarily responsible. Once the agency's designated officer has been told, the agency must also file unless the salesperson already has (Estate Agents (PMLPFTF) Regulations 2021, regs 11(4)–(4A) and 12G(4)–(5), from 1 Jul 2025). Never tip off the client.
Must I do due diligence on the other party if they have no agent?: Yes. Under the revised PMLPFTF Regulations, estate agents and salespersons must conduct Unrepresented Counterparty Due Diligence (UCPDD) on the other side of a sale or lease where that party is not represented by an agent — the same identity, beneficial-owner, PEP, sanctions-screening and risk-assessment checks you do for a client. Carry them out once it is clear the deal is likely to proceed, but before the parties enter into any agreement. Ongoing monitoring is the one duty that does not extend to an unrepresented counterparty.
Do the AML checks apply to HDB rental transactions?: HDB residential rentals — whole flat or room — have been exempt from CDD and UCPDD since 1 July 2025, because of their lower risk profile. The exemption does not cover anything else: all sales and purchases, and all non-HDB rentals, still require both. And it never removes the duty to file a Suspicious Transaction Report if something suspicious surfaces during the work.

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Study material aligned to the public CEA syllabus. Not financial or legal advice — verify current figures with the relevant authority (IRAS, HDB, CEA, MAS).