New FinCEN Reporting Requirement Begins March 1, 2026

Starting on March 1, 2026, certain professionals involved in real estate closings and settlements will be required to submit reports to the federal Financial Crimes Enforcement Network (FinCEN) regarding certain non-financed transfers of residential real estate to legal entities or trusts under a process known as the Residential Real Estate Rule. 

While real estate agents and brokers generally won’t be the ones to fill out and submit the paperwork, the new rule is still likely to affect your business. This article provides an overview of the new rules, with many more resources, including quick reference guides for consumers and a very detailed FAQ, available on the FinCEN website.

Additionally, the National Association of Realtors® will hold a webinar on the new reporting requirement. Sign up for it here.

Why are these reports required? 

These reports add to existing federal government programs targeting potential money laundering through residential real estate transfers and are designed to catch transactions that might be structured to evade the existing rules. 

When does the reporting requirement go into effect? 

Reports must be filed for any reportable transfer that closes on or after March 1, 2026. Transactions closed before that date do not have to reported. Those that were scheduled before March 1 but occurred on or after that date will need to be reported. 

What types of transactions are covered? 

The FinCEN Residential Real Estate Rule requires that reports be filed when a transaction meets all of the following criteria: 

• The property is residential real estate, AND 
• The transfer is non-financed, AND 
• The transferee (buyer) is a legal entity or trust, AND 
• There are no exemptions that apply. 

What is “residential real estate”? 

For the purposes of this rule, “residential real estate” is any transferred property with 1-4 residential units, and vacant land where the purchaser intends to build (or have built) housing with 1-4 residential units. It also includes transfers of units for 1-4 families within a larger building (e.g., the purchase of a single apartment, condominium or cooperative unit in a larger building is covered, though the sale of the entire building would not be). 

What is a “non-financed” transfer? 

This is easier to define in the reverse. A financed transfer is one that is: (1) secured by the transferred property, and (2) financed by a financial institution that is subject to anti-money laundering (AML) requirements and required to file suspicious activity reports (SARs). If funding comes from any other source, including lenders not subject to the above rules, the transaction is considered to be “non-financed,” and a report must be filed. 

What types of buyers trigger the reporting requirement? 

Reports are required for transfers to many types of legal entities (such as corporations, partnerships and LLCs) and to certain types of trusts. The FinCEN FAQ contains much more detail on the types of entities that are reportable, along with the many exceptions. Transfers directly to one or more actual human beings are not subject to the reporting requirement, however. 

Are there exceptions to the reporting rule? 

Yes, but they won’t be covered here. The FinCEN FAQ contains much more detail on the types of transactions that would be exempt, even if they met the regular criteria. 

Who is required to file a report? 

The rule contains a “reporting cascade” with seven identifiable roles to define who is responsible for filing a report, starting at the top and working down. In most transactions, the report is likely to be filed by the closing or settlement agent for the transaction (e.g., closing company, title company, attorney), but if no such person exists, there are additional options. It’s unlikely that a real estate brokerage would be responsible for filing the report, unless that brokerage conducts one of the activities on the list and there are not reporting entities higher in the cascade.  

What information must be included in the report? 

In general, the reporting entity will be required to include certain types of information sufficient to identify: 

• The reporting person 
• The residential real estate being transferred 
• The transferee entity or trust 
• The beneficial owners of the entity or trust 
• Certain individuals representing the entity or trust in the transaction 
• The transferor 

The exact information that must be reported will depend on the details of the transaction, but it will include information like an entity’s legal name and trade names, the entity’s tax ID and information about beneficial owners (including their address, tax ID/SSN, and residential address). The FinCEN FAQ contains much more detail on information that may be required.  

How will this information be collected? 

The reporting person may collect the required information using a form of their choosing or design which may be incorporated into existing closing documents. The information can be collected directly from the transferee(s) and transferor(s), or from their representatives so long as the person the information is collected from certifies in writing that the information they have provided is correct to the best of their knowledge.  

It is recommended that real estate brokers and agents not provide this information directly as a representative of their clients but should simply be the conduit for relevant forms as necessary. For example, if a title company asks for information from your client, pass the request and/or form to the client for them to provide the information so you minimize liability for possible inaccuracies. 

What can I do to make this easier for my clients? 
 
Consult with the various closing companies, title agents and attorneys in your market who are likely to be the reporting person under the rule, and work with them to understand their policies and procedures. And if you believe a particular transaction is subject to the reporting requirements, open that line of communication as early as possible once the closing agent has been identified. While all will have the same requirements, they may ask for information in different formats and on different timelines, so it’s important to get a handle on those expectations as soon as possible in each transaction. 

What if a party refuses to provide the requested information for a reportable transaction? 

An incomplete report subjects the reporting party to possible sanctions, and there are no exceptions for things like uncooperative parties or incomplete responses. The odds are pretty good that if a party refuses to provide some or all of the required information, no reputable reporting person will close the transaction. This is why it’s important to connect with the closing agents as soon as possible to work out what they require, in what format and on what timeline.  

Are there PAR Standard Forms changes that reflect the reporting rule? 

Not at this time. The Standard Forms Oversight Committee has discussed the issue and decided to not make any changes as of the date this article was published. The committee will assess how the rules are implemented before determining what forms changes may be appropriate.