FinCEN Reporting Changes. What It Means for Your Transaction.
Beginning March 1, 2026, a new federal rule from the Financial Crimes Enforcement Network (FinCEN) will change reporting requirements for certain residential real estate transactions. The Residential Real Estate Rule applies to some non-financed transactions involving legal entities or trusts and is designed to increase transparency and reduce illegal activity in real estate nationwide.
This FAQ section answers common questions about how the rule works, which transactions may be affected, and what buyers, sellers, and real estate professionals should expect. As always, the details matter, and our team is here to help guide you through the process.
What is the Real Estate Report?
The Real Estate Report will be a new form that certain real estate professionals involved in certain real estate closings and settlements must file with FinCEN for certain transfers of residential real estate that are a high-risk for illicit finance. The information reported will help combat and deter money laundering by increasing transparency in the U.S. residential real estate sector.
Under what circumstances must a Real Estate Report be filed?
A Real Estate Report must be filed on any reportable transfer, which is defined in the final rule as a non-financed transfer to a transferee entity or transferee trust of an ownership interest in residential real property.
What is residential real property?
Residential real property includes single-family houses, townhouses, condominiums, and cooperatives, including condominiums and cooperatives in large buildings containing many such units, as well as entire buildings designed for occupancy by one to four families. These properties are reportable even if there is also a commercial element—a single-family residence that is located above a commercial enterprise, for example. Certain types of land on which a residence is not yet built are also included.
What is a transfer of residential real property?
A transfer of residential real property is any transfer of an ownership interest in residential real property that is demonstrated through a deed or, for an interest in a cooperative housing corporation, through stock, shares, membership, a certificate, or other contractual agreement evidencing ownership.
This definition includes purchases of residential real property for any amount, as well as transfers of ownership for which no consideration is exchanged, such as a gift.
What is a non-financed transfer?
A non-financed transfer is a transfer that does not involve an extension of credit to all transferees that is both (1) secured by the transferred property and (2) extended by a financial institution subject to AML program requirements and Suspicious Activity Report (SAR) reporting obligations. Under this final rule, a reportable transfer is a non-financed transfer to a transferee entity or transferee trust of an ownership interest in residential real property. Transfers that are financed by a lender without an obligation to maintain an AML/CFT program and a requirement to file SARs are treated under the final rule as non-financed transfers that potentially must be reported.
What types of transfers are not considered reportable?
The following transfers are not reportable:
-
A transfer that is a grant, transfer, or revocation of an easement.
-
A transfer resulting from the death of an individual, whether pursuant to the terms of a will, the terms of a trust, the operation of law (such as transfers resulting from intestate succession, surviving joint owners, and transfer-on-death deeds), or by contractual provision (such as transfers resulting from beneficiary designations).
-
A transfer incident to divorce or dissolution of a marriage or civil union (such as transfers required by a divorce settlement agreement).
-
A transfer made to a bankruptcy estate.
-
A transfer supervised by a court in the United States.
-
A transfer for no consideration made by an individual, either alone or with their spouse, to a trust of which that individual, that individual’s spouse, or both, are the settlors or grantors.
-
A transfer to a qualified intermediary for the purposes of a like-kind exchange for purposes of Section 1031 of the Internal Revenue Code.
-
A transfer for which there is no reporting person.
Note that this is not a comprehensive list of all transfers that are not reportable, and reporting persons should evaluate the specific facts of each individual transfer to determine whether it constitutes a reportable transfer under the rule.
Who is required to file Real Estate Reports?
The requirement to file a Real Estate Report rests with the “reporting person,” one of a small number of persons who play specified roles in the reportable transfer. Only one business would be deemed to be the reporting person, and would be required to file a report.
The reporting person can be identified in one of two ways:
-
By way of the reporting cascading described in the rule (see Question C.2), or
-
By way of a written designation agreement between the real estate businesses described in the cascading reporting order
Who is required to file Real Estate Reports?
The requirement to file a Real Estate Report rests with the “reporting person,” one of a small number of persons who play specified roles in the reportable transfer. Only one business would be deemed to be the reporting person, and would be required to file a report.
The reporting person can be identified in one of two ways:
-
By way of the reporting cascading described in the rule (see Question C.2), or
-
By way of a written designation agreement between the real estate businesses described in the cascading reporting order
Still Have Questions?
When it comes to navigating the new FinCEN reporting rules, the entire American Land Title team is here to help. Please contact any of our team members with questions, and we'll make sure to get you an answer.