Understanding the FinCEN Residential Real Estate Reporting Rule
By David W. Birdsong
In 2024 the Financial Criminal Enforcement Network (FinCEN), a division of the United States Treasury Department, adopted the FinCEN Residential Real Estate Reporting Rule, with a starting date of December 1, 2025. This starting date has been pushed back to March 1, 2026, and may be pushed back further but as of today real estate buyers, sellers, investors and particularly title companies need to be aware of this rule and what it requires of real estate transactions after the date it finally begins.
Certain individuals (mostly title companies but it also applies to transactions without title companies) will have to file a report with FinCEN regarding certain real estate closings.
The rule applies to:
Transfers involving residential real estate, includes condos, townhouses, vacant land zoned for residential housing; where The Purchaser is a Limited Liability Company, Corporation, Partnership, and certain Trusts; and Where the transaction does not include financing by an entity that currently does not have to comply with government anti-money laundering regulations (such as a bank, credit union, certain national lenders).
Reports will have to be filed for transfers by cash sales, owner financing, hard money loans, private loans, donations, quitclaims, etc. There are some exceptions for estate planning trusts but those are very limited.
The report will have to include:
For the property, the street address, legal description, date of closing.
For the Transferee entity (LLC, Corp., Partnership its name, address, tax identification number. It will also need to include information on the beneficial owners of the entity. A beneficial owner is someone who owns a 25% or larger interest in the entity, or someone who has “substantial control” over the company, such as an officer or manager. The report also requires information on the person signing for the entity, regardless of whether they have a beneficial ownership or control. The required information includes the persons’ full name, residential address, citizenship, date of birth and social security number.
If the Transferee is a Trust, the report must state: The name of trust, the date the trust was executed, the tax identification number and whether the trust is revocable or irrevocable. Information on certain individuals related to the trust have to be included in the report. Those individuals are the trustee, any beneficiary who can demand or make a withdrawal of assets from the trust, along with any grantor or settlor with right to revoke the trust or withdraw assets from the trust. If the trustee or beneficiary is an entity, the same beneficial ownership information as stated above needs to be disclosed. Also, the information for anyone signing for the trust if they are not the trustee. For all of these individuals the report must state their full name, residential address, citizenship and tax identification number.
For the transferor of the property certain information needs to be disclosed as well. If an individual the report requires their full legal name, date of birth, residential address and social security number. If the transferee is an entity (LLC, Corp., Partnership), the report must state the full legal name of entity, a street address and a tax identification number. If the transferee is a trust, the report must state the full name of trust, the date it was executed, and the tax identification number for the trust. Also, the Trustees full name, residential address and tax identification number.
Finally the report must disclose information regarding any funds that were brought to the closing. It must state, the originating financial institution, the account number, the name on the account, the method of payment (wire/check), and the dollar amount of payment.
There are civil and criminal penalties for failure to file the required report with FinCEN.
The American Land Title Association (ALTA), the national association of real estate title attorneys, has been pushing for reforms to lessen the impact of these reporting requirements, particularly on small title companies. ALTA Estimates the rule will add 2 ½ hours of additional time per file for title companies. There is a strong possibility this will result in an additional compliance fee for preparing and filing the report that will be passed on to the parties to any transaction. ALTA has been pushing congress to ask FinCEN to lessen the impact through such items as creating a minimum dollar amount for a transaction before a report is required or only requiring a report when a foreign entity or individual is involved.
Fidelity National Title Insurance Company has filed suit challenging the way the rule was adopted and requested a Temporary Restraining Order prohibiting the rule from going into effect pending the outcome of the trial. The hearing on the TRO was scheduled for Sept. 30, 2025. On that day FinCEN announced it was pushing back the implementation of the rule to March 1, 2026. Based on that the hearing date on the TRO was postponed.
Investors need to be aware there is a strong possibility this rule will go into effect in early 2026. Investors need to contact their Congressman and encourage them to reach out to FinCEN to take any steps necessary to lessen the impact this reporting rule will have on real estate transactions in the future.
David Birdsong is an attorney with Gulf South Title Group in Metairie LA, and is Vice President and Legal Counsel of the New Orleans Real Estate Investors Association. Click here to email him.
