FinCEN’s New Residential Real Estate Reporting Rule: What Real Estate and

Companies, trusts, family offices, private investors, developers, and real estate investment vehicles acquiring U.S. residential property without bank financing will soon face a new federal reporting requirement. Title companies, settlement agents, escrow providers, and real estate attorneys involved in closings may also be directly affected.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has adopted a new Residential Real Estate Reporting Rule (the “RRE Rule”) under the Bank Secrecy Act. Beginning March 1, 2026, certain non-financed transfers of U.S. residential real property to legal entities and trusts must be reported to FinCEN.

This rule is designed to address perceived money laundering risks in all-cash and entity-based residential real estate transactions and represents a significant expansion of federal reporting obligations in the real estate sector.

When Does the Rule Apply?

The RRE Rule applies to a “reportable transfer,” which generally includes:

1. A transfer of an ownership interest in U.S. residential real property
2. Where the transferee is a legal entity (such as an LLC, corporation, or partnership) or a trust
3. And the transfer is non-financed, meaning it is not funded by a loan from a financial institution subject to federal anti-money laundering program and Suspicious Activity Report obligations

Residential real property includes one-to-four family homes, townhouses, condominiums, cooperative housing units, and certain vacant land intended for residential construction.

In practical terms, many all-cash acquisitions of residential property by LLCs, partnerships, and trusts will fall within the scope of the rule.

Are There Exemptions?

Yes. The rule contains several exemptions, including certain transfers:

1. Incident to death, divorce, or bankruptcy
2. Supervised by a court
3. Involving specific estate planning structures with no payment
4. Involving certain highly regulated entities

The applicability of an exemption depends on precise regulatory definitions. Transaction participants should evaluate exemption eligibility carefully before assuming reporting is not required.

Who Must Report?

The reporting obligation does not fall directly on the buyer or seller. Instead, the rule establishes a hierarchy of “reporting persons,” generally beginning with the settlement or closing agent and cascading to other transaction participants if necessary.

In many transactions, the reporting party will be:

1. A title company or title insurance agent
2. A settlement or escrow agent
3. A real estate attorney handling the closing

Parties may enter into a written designation agreement assigning reporting responsibility among eligible participants.

Because reporting responsibility depends on transactional roles and documentation, professionals involved in closings should review internal processes well before the March 2026 effective date.

What Information Must Be Reported?

The Real Estate Report, filed through…