A major shift is coming to the real estate industry, and it’s one every professional involved in closings should understand. Beginning March 1, 2026, the Financial Crimes Enforcement Network (FinCEN) will implement a new Anti-Money Laundering (AML) rule that expands reporting requirements for certain residential real estate transactions.
This rule is designed to bring greater transparency to cash purchases made through legal entities and trusts. These are areas of the real estate market FinCEN has long identified as vulnerable to misuse.
If you’re a real estate attorney, agent, lender, or title professional, this rule is something you need understand. Here’s a clear breakdown of what’s changing and how to prepare.
Why FinCEN Is Introducing This Rule
FinCEN, part of the U.S. Department of the Treasury, has repeatedly warned that criminals often use real estate, especially cash purchases made through LLCs and trusts, to hide illicit funds. Without traditional financing, these transactions bypass the scrutiny banks apply under existing AML laws.
A few key insights that shaped the rule:
- Billions of dollars have been funneled through U.S. real estate using opaque ownership structures.
- Roughly one-third of all U.S. home purchases in 2024 were made in cash, creating a large pool of transactions with limited oversight.
FinCEN’s goal is simple: make it harder for bad actors to hide behind anonymous entities and easier for legitimate professionals to help protect the integrity of the market.
Which Transactions Are Covered?
The new rule applies to non-financed (cash) transfers of residential real estate when the buyer is a legal entity or trust.
If the buyer is an individual purchasing in their own name, the rule does not apply.
FinCEN defines “residential real property” broadly. It includes:
- Single-family homes
- Condominiums and co-ops
- Townhouses
- 1-4 family buildings
- Vacant land intended for future residential construction
What Information Must Be Reported?
For transactions that fall under the rule, the responsible party must file a Real Estate Report with FinCEN. This report includes:
- Information About the Reporting Party – Name and contact details of the person or company filing
- Property Details – Address and basic characteristics of the property
- Seller (Transferor) Information
- Buyer (Transferee) Information – Entity or trust detailsand details of anyone acting on behalf of the buyer
- Beneficial owners, including full legal name; date of birth; residential address; citizenship; and taxpayer identification number.
- Transaction Details – Purchase priceand how the funds were paid
FinCEN estimates that each report may require completing 40–60 of 111 data fields, depending on the transaction.
Who Is Responsible for Filing?
FinCEN created a “reporting cascade”. This is a hierarchy that determines who must file the report. The first applicable party in the list becomes the reporting person:
- Settlement agent listed on the settlement statement
- Settlement statement preparer
- Person who files the deed
- Title insurance issuer
- Greatest funds disburser
- Title examiner
- Person who prepares the deed or transfer instrument
Parties may also enter into a Written Designation Agreement to assign reporting responsibility.
When Is the Report Due?
The Real Estate Report must be filed by the last day of the month after the month of closing, or within 30 days after closing, whichever is later.
Records must be retained for at least five years.
Operational Challenges to Expect
The rule introduces new responsibilities for title and escrow companies, including:
- Expanded Data Collection –Teams must gather detailed information they’ve never previously been required to collect.
- Verification Requirements – All information must be accurate and complete before submission.
- Increased Workload – The Real Estate Report includes up to 111 possible fields, adding administrative time to each qualifying file.
- Heightened Data Security Needs – Sensitive personal information must be collected and stored securely. Email is no longer an acceptable method.
- Potential Closing Delays – If a buyer or seller refuses to provide the required information, the closing must be postponed until the data is obtained.
- Penalties for Non-Compliance
- Nearly $1,400.00 per violation
- Up to $108,489.00 for negligent patterns of noncompliance
- Up to $250,000 and five years in prison for willful violations
FinCEN estimates 800,000–850,000 transactions per year will require reporting.
How Real Estate Professionals Can Prepare Now
Although the rule takes effect on March 1, 2026, preparation should begin well ahead of time. Key steps include:
- Training staff to identify reportable transactions
- Assigning clear roles for data collection and reporting
- Building repeatable workflows for gathering and verifying information
- Implementing secure technology for handling sensitive data
- Educating clients about why this information is required
- Testing processes early to avoid last-minute challenges
How We Can Help
As the real estate industry prepares for the new FinCEN reporting requirements, Monaco Cooper Lamme & Carr, PLLC and our sister title services firm, Maverick Title Services, LLC, are uniquely positioned to guide clients through the added layers of compliance and transaction complexity. Our teams combine deep transactional experience with modern technology to help identify reportable transactions, securely collect the required information, and maintain clear, organized workflows from contract to closing. With our coordinated support, real estate professionals can navigate these new obligations with confidence, knowing they have reliable partners who understand both the legal and operational demands of FinCEN reporting.
Final Thoughts
FinCEN’s new AML rule marks one of the most significant regulatory changes the real estate industry has seen in years. While the requirements may feel overwhelming at first, early preparation, paired with the right partners, will make the transition far smoother.
If you have questions about how this rule may affect your transactions, our team is ready to help you navigate the road ahead.
