March 2, 2026
FinCEN's Residential Real Estate Reporting Rule
After a delayed rollout, FinCEN’s new Residential Real Estate Reporting Rule took effect on March 1. The rule expands federal oversight in the residential real estate space and is aimed at preventing bad actors from using certain residential transactions to facilitate money laundering, sanctions evasion, and other financial crimes. At a high level, the rule requires a Real Estate Report to be filed for certain transfers of residential real property to legal entities or trusts where no traditional bank financing is involved, regardless of the consideration paid. Transfers solely to individual buyers are excluded.
A cascading framework identifies the “reporting person” responsible for filing the Real Estate Report. The hierarchy runs as follows: (1) the closing or settlement agent identified on the settlement statement; (2) the preparer of the settlement statement; (3) the party responsible for recording the deed; (4) the title insurance underwriter, if applicable; (5) the person disbursing the largest amount of funds; (6) the provider of the title evaluation; and (7) the preparer of the deed. Because roles vary by transaction, practitioners may be the reporting person in some deals but not others. Those who would otherwise bear responsibility under the cascade may also agree in writing among themselves to designate which of them will serve as the reporting person.
The reporting person must submit information regarding the transferee entity or trust, its beneficial owners, the transferor, the property, and the consideration paid. While responsible for filing the report, the reporting person generally is not expected to independently verify beneficial ownership information and may obtain it directly from the transferee or its representative, who must certify its accuracy.
In practical terms, real estate professionals should be alert to residential transactions, including gifts, where a lender is not involved and one or more grantees is a legal entity or trust, as those transactions may trigger reporting. Practitioners handling residential transactions should review intake procedures and closing workflows. Understanding where your role fits within the reporting cascade, and how beneficial ownership information will be collected and documented, will help ensure a smooth transition. For additional information, visit www.fincen.gov/rre.
A cascading framework identifies the “reporting person” responsible for filing the Real Estate Report. The hierarchy runs as follows: (1) the closing or settlement agent identified on the settlement statement; (2) the preparer of the settlement statement; (3) the party responsible for recording the deed; (4) the title insurance underwriter, if applicable; (5) the person disbursing the largest amount of funds; (6) the provider of the title evaluation; and (7) the preparer of the deed. Because roles vary by transaction, practitioners may be the reporting person in some deals but not others. Those who would otherwise bear responsibility under the cascade may also agree in writing among themselves to designate which of them will serve as the reporting person.
The reporting person must submit information regarding the transferee entity or trust, its beneficial owners, the transferor, the property, and the consideration paid. While responsible for filing the report, the reporting person generally is not expected to independently verify beneficial ownership information and may obtain it directly from the transferee or its representative, who must certify its accuracy.
In practical terms, real estate professionals should be alert to residential transactions, including gifts, where a lender is not involved and one or more grantees is a legal entity or trust, as those transactions may trigger reporting. Practitioners handling residential transactions should review intake procedures and closing workflows. Understanding where your role fits within the reporting cascade, and how beneficial ownership information will be collected and documented, will help ensure a smooth transition. For additional information, visit www.fincen.gov/rre.
Related Attorneys
