How FinCEN’s New Reporting Requirement May Impact Some Commercial Transactions

As of March 1, 2026, information about certain types of “residential real property” transfers must be reported to the federal Financial Crimes Enforcement Network under the Residential Real Estate Rule. But despite the name, a slice of commercial and development transactions may also be subject to those reporting rules. 

• “Residential real property” includes any property designed for residency by one to four families, regardless of how the transaction may be framed. This could include: 
  • Multi-unit rentals with up to four units
  • Commercial mixed-use properties (e.g., retail on the ground floor, with up to four apartments upstairs)
  • Portfolio purchases of properties that qualify as residential real estate (e.g., a purchase of 10 single-family rental homes) 

• The rule also covers vacant land on which the buyer intends to build at least one structure designed for occupancy by one to four families. 
  • Disclosures would be required from a developer who buys a tract with the intent to create a residential neighborhood under their ownership (presuming the other criteria of the rules are met). 
  • Disclosures would not be required from a developer who buys a tract with the intent to resell the entire tract or individual lots to others who will then build homes (though they might have to make certain disclosures as the seller if the eventual resale transaction is covered by the rule). 

The reporting requirement is also based on other criteria not discussed here (the properties must be transferred through a “non-financed” transaction to a “transferee entity” such as a corporation, LLC or trust), and of course, there are many exceptions and nuances to the requirements. Any buyer, seller or licensee with questions about whether a specific transaction is likely to trigger a reporting requirement, and how to handle the reporting if it does, should seek advice from an attorney and/or financial professional who is familiar with these rules. 

Learn more about the FinCEN requirement regarding residential real estate transactions.

Additionally, the National Association of Realtors® will hold a webinar on March 11 at 2 p.m. titled “Understanding the FinCEN Residential Rule.” Pre-register to attend the webinar.