Anti-Money Laundering for Real Estate Agents

Real estate is considered one of the preferred ways to invest large sums of illegal origin permanently. Real estate agents are therefore obliged entities under the German Anti-Money Laundering Act (Section 2(1) No. 14 GwG) and are increasingly in the focus of the supervisory authorities.

When do the obligations apply?

Activity	GwG obligations
Brokering purchase contracts	Risk management and due diligence – towards the buyer and the seller
Brokering rental or lease agreements	From a monthly net rent or lease of €10,000

Your core obligations

Risk assessment and internal safeguards, including a responsible person at management level
Identification of the contracting parties as soon as there is a serious interest in concluding the contract
Determining the beneficial owner – especially for purchases via companies, trusts or nominees
PEP check and screening against sanctions lists
Record-keeping and retention of documents (generally five years)
Suspicious activity reports to the FIU in the event of red flags

Warning signs in real estate transactions

Opaque buyers

Acquisition via complex company structures or foreign vehicles without an apparent reason.

Unusual financing

High equity without a plausible source, payments by third parties.

Conspicuous prices

Significantly above or below market value, quick resales.

Time pressure

Strong pressure for a quick deal, lack of interest in property details.

Since April 2023, cash payments for real estate purchases have been prohibited in Germany. Agents should therefore pay all the more attention to unusual payment channels and financing.