FinCen Residential Real Estate Reporting Rule

The Financial Crimes Enforcement Network (FinCen) has a new rule relating to residential real property which goes into effect on March 1, 2026. The purpose of this rule is, in part, to combat money laundering. If all four of the following factors apply, then the real estate transaction has to be reported to FinCen:

1. The property is residential real estate for occupancy of one to four families.
2. The property is transferred for cash (so basically no bank financing).
3. The property is transferred into a corporate entity (such as an LLC) or a trust.
4. No exception applies.

As for the first item, vacant land which the transferee (buyer) intents to build a one to four family structure falls within the reporting requirement. And, if the property is say two stories with a store front on the first floor and a residential apartment or condo on the second floor also falls within the reporting requirement.

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As for the second item, what if the transfer is a gift? Yes, the transaction still falls within the reporting requirement. What if the transfer is for no consideration? Yes, the transaction still falls within the reporting requirement. What if the transfer is for below market consideration? Yes, the transaction still falls within the reporting requirement. If the transfer is to a trust and the transferor is also the grantor of the trust and no consideration is paid, it is possible that this transaction is exempt from reporting.

If a transaction is reportable, when is the report to be filed? A reportable transaction must be reported to FinCen by the later of (i) the last day of the month in which the transaction occurred or (ii) 30 calendar days after the closing date. FinCen has set up a portal in order to submit the required report. A separate article will be prepared indicating the information that needs to be reported.

Who is required to submit the report to FinCen? In order to determine the identity of the “reporting person,” a reporting cascade has been created. You basically work your way down a list that was created in order to determine which professional involved in the transaction is responsible for preparing and submitting the report. If a title company is assisting in the closing of the transaction, then the title company is to prepare and submit the report. If there is no title company involved in the transaction, then the party who records the deed with the County Recorder’s Office is to prepare and submit the report, etc, etc.
 

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Chris Corpus

Founding Partner at Corpus Law Inc

This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at 216-973-2475. Copyright Christopher A. Corpus 2026.