Why Real Estate Professionals are exposed to financial crime risk and how to respond with confidence
Real estate professionals are attractive to organised criminal networks because property transactions provide an effective means to integrate and conceal illicit funds through high-value assets that can appreciate over time, often involving complex ownership structures, third-party intermediaries or offshore entities that obscure beneficial ownership.
Criminals may exploit agents, conveyancers, or developers to purchase, sell, or renovate properties as part of laundering schemes, sometimes using cash payments or rapid resale strategies to legitimise proceeds of crime. To mitigate these risks, it is essential that real estate professionals maintain a robust, enterprise-wide money laundering, terrorism and proliferation financing risk assessment framework.
By systematically identifying and assessing their exposure to financial crime risks, and by evaluating the design and operational effectiveness of their mitigating controls in a manner appropriate and proportionate to their nature, size, and complexity, they can protect their business, maintain regulatory compliance and uphold trust and integrity within the property market.
For Money Laundering Reporting Officers (MLROs) and senior compliance leaders in this sector, the challenge is no longer simply to satisfy minimum regulatory obligations it is to demonstrate a deep, defensible and evidence-based understanding of financial crime risk that withstands regulatory review, supports investment and client acceptance decisions and drives proportionate, risk-aligned control execution.
Arctic Intelligence’s ML/TF/PF Risk and Control Assessment Solution has been developed specifically for Real Estate Professionals. It supports them in meeting regulatory expectations, providing a structured, evidence-based, regulator-ready framework that empowers teams to identify, assess and govern financial crime risk across every line of business.
Why Real Estate Professionals are targeted by organised criminal networks
Real Estate Professionals are not targeted because they are careless. They are targeted because they are effective. Criminal networks deliberately seek out real estate agents, property developers, brokers and settlement professionals who can provide access to high-value assets, facilitate complex transactions, and confer legitimacy on large flows of funds. Property transactions offer scale, relative stability and the ability to layer and integrate illicit funds through resale, refinancing and leasing.
Key vulnerabilities include:
- High-value asset transactions. Property purchases provide a powerful mechanism for integrating large volumes of illicit funds in a single transaction.
- Use of corporate vehicles and trusts. Property is frequently acquired through companies, trusts and layered ownership structures that can obscure beneficial ownership.
- Client funds and deposits. Holding of deposits, settlement funds and escrow-style arrangements can be exploited to move and layer illicit funds.
- Cross-border property investment. Foreign buyers and offshore structures introduce higher ML/TF/PF and sanctions risk, particularly where source of funds is opaque.
Taken together, these features make Real Estate Professionals a primary target for organised criminal networks and place enterprise-wide, evidence-based ML/TF/PF risk assessment at the centre of regulatory expectations.
Typical ML/TF/PF risks faced by Real Estate Professionals
The risk profile of a real estate business is shaped by its client base, property types, transaction volumes and geographic footprint. Common risk exposures include:
Misuse of Property Transactions
- Purchase of residential or commercial property to integrate illicit funds
- Rapid resale (“flipping”) to layer criminal proceeds
- Use of related-party transactions or artificial valuations
- Sham tenancies or rental arrangements used to justify cash flows
Client and Buyer Risk
- Buyers or sellers using complex corporate or trust structures
- Politically exposed persons (PEPs) and high-net-worth clients with opaque wealth
- Clients linked to sanctioned, conflict-affected or higher-risk jurisdictions
Transaction and Funds-Handling Risk
- Large cash deposits or unexplained payment structures
- Third-party payments not linked to the named buyer or seller
- Cross-border funds flows without clear economic rationale
Sanctions and Proliferation Exposure
- Property transactions involving sanctioned individuals, entities or jurisdictions
- Exposure to clients engaged in high-risk trade, logistics or industrial activities
- Inadequate screening of beneficial owners and source of funds
These risks intersect and compound without structured, enterprise-wide assessment.
What Real Estate Professionals must consider when conducting financial crime risk assessments
A credible ML/TF/PF risk assessment is not a static compliance document. It is a living risk intelligence framework that informs client onboarding, transaction approvals, monitoring priorities and control investment.
At a minimum, real estate businesses must ensure their risk assessments:
- Are enterprise-wide and proportionate to their services, property types and geographic footprint
- Clearly identify inherent risk before controls are applied
- Assess both control design and operational effectiveness
- Produce auditable, evidence-based outcomes that regulators can challenge and test
- Are refreshed in response to emerging threats, market shifts, geopolitical change and regulatory reform
Manual spreadsheets and static documents increasingly fail to meet supervisory expectations.
Arctic Intelligence’s ML/TF/PF Risk and Control Module for Real Estate Professionals
Arctic Intelligence provides a purpose-built ML/TF/PF Risk and Control Module designed specifically for Real Estate Professionals. The module delivers regulator-aligned, pre-built risk content across the full risk assessment lifecycle while remaining fully tailorable to reflect each firm’s services, jurisdictions and risk appetite.
Who does this module apply to?
The money laundering, terrorism and proliferation financing risk and control module contains a library of risks, controls and control tests designed specifically for different types of Real Estate Professionals:
| Real Estate Advisers | Real Estate Agents and Agencies |
| Buyer’s Agents | Real Estate Brokers |
| Conveyancers | Settlement and Escrow Agents |
| Property Agents and Managers | Sellers Agents |
| Property Developers | Property Marketers |
What does this module contain?
Enterprise-wide ML/TF/PF risk assessment, covering the following risk groups:
- Environmental Risk – covering exposure to internal and external risk indicators.
- Customer Risk – covering customer base profile, customer location risk, legal form risk, industry / occupation risk, PEP risk and customer activity risk.
- Industry Red Flag Risk – covering ML/TF/PF red flags associated with Real Estate Professionals.
- Product and Services Risk – covering the services provided by Real Estate Professionals that are subject to AML/CTF laws and the inherent risk characteristics of each of these.
- Channel Risk – covering face-to-face and non-face-to-face customer onboarding and transaction channels.
- Transaction Risk – covering higher risk transaction types.
- Country Risk – covering higher risk country risk exposures based on the residency, nationality or citizenship (Individuals) and country of registration, incorporation, domicile or operations (Entities).
Also included is a comprehensive library of suggested controls and control tests relevant to real estate firms and professionals to support the design and operational effectiveness testing of controls.
Firms can deploy the content module out-of-the-box or tailor it to their methodology, eliminating the need to start from scratch while maintaining full ownership of their risk model.
The module also includes a comprehensive library of suggested real estate sector controls and control tests to support design and operational effectiveness testing.
From regulatory obligation to strategic risk insight
Real estate professionals are now expected to demonstrate that their ML/TF/PF risks are understood, governed and actively managed.
By combining structured methodology with pre-built, tailorable content, real estate businesses can move beyond compliance as paperwork and build a defensible, intelligence-driven risk framework that protects the firm, its clients and the integrity of the property market.
Get started with Arctic Intelligence
Whether you are establishing your first enterprise-wide ML/TF/PF risk assessment or upgrading a legacy spreadsheet-based program, Arctic Intelligence’s Real Estate Professionals Risk and Control Module is a scalable, defendable and configurable solution that meets the needs of modern compliance teams.
Book a demo or contact us to explore how our platform can help your business strengthen compliance, mitigate financial crime risk and build a risk program that stands up to regulatory scrutiny. Or visit our website to learn more.
