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FinCEN Expands Real Estate Anti-Money Laundering Rules Effective March 1, 2026
By: Alessandro Secino, Esq.
Beginning March 1st, 2026, the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”) will implement new federal reporting requirements intended to curtail money laundering through additional reporting when real property is purchased through an entity such as limited liability company, partnership, or trust. These new regulations replace the FinCen’s prior Geographic Targeting Order framework which imposed reporting obligations based on location, price, and type of property.
Unlike the earlier limited framework, the new more expansive rule not only applies nationwide, but also captures a far greater number of transfers and requires substantial information be reported to the federal government. It is important that both buyers and sellers be mindful of these new reporting requirements when looking to move forward with a transaction, as even routine real estate transfers may trigger federal reporting requirements starting March 1st.
Who Must Report?
Under the new regulatory framework, any person or business in the U.S. that provides real estate closing and settlement services is required to report the transaction. This includes closings agents, law firms, title companies, title underwriters, or anyone that records documents or disburses funds in connection with a real estate transfer. Real estate agents and brokers are not required to report unless they are acting in one of the above capacities.
When Is Reporting Required?
A reportable transfer subject to this rule is any transfer of residential real property to an entity or trust that is not financed by an institutional lender. Private financing arrangements, including hard money loans, do not qualify as institutional financing for purposes of the reporting exemption. The rule applies not only to properties with existing residential structures but also applies to vacant land when the buyer intends on building a residential structure designed for occupancy by one to four families. Notably, there is no requirement that funds be exchanged for a transfer to be reportable.
This will ultimately result in a far greater number of transactions being subject to the reporting requirements.
Contents of the Report
When completing the report, the reporting party must submit what is called the “Real Estate Report” to FinCEN which requires the disclosure of the following information about both the seller and buyer.
With respect to the buyer, the report must include the buyer’s full legal name, including any trade or d/b/a names, principal place of business and street address, and taxpayer identification number. In addition, the reporting party must disclose identifying information for each beneficial owner of the purchasing entity. This includes each beneficial owner’s full legal name, date of birth, current residential address, taxpayer identification number (such as a Social Security number), and citizenship status.
With respect to the seller, the report must include the seller’s full legal name, date of birth, current street address, and taxpayer identification number, including a Social Security number where applicable.
The same identifying information must also be provided for any individual signing on behalf of an entity. Where ownership involves multiple layers of entities, disclosure obligations extend to each sub-entity and its beneficial owners.
In addition to the information required to be supplied about the buyer and seller, the reporting party must also provide information regarding the property that was transferred, the method of payment, and the name of the financial institution where the proceeds originated from. All certifications received from a buyer as to this information must be retained by the reporting party for a period of five years.
Practical Impact of the New Reporting Rule
Now before you close out what appears to be a fairly technical legal article, the scope of these new reporting requirements will impact a substantial number of fairly routine real estate matters. To illustrate this, below is an example of a common real estate matter that would now require reporting under these new rules.
A husband and wife own a residential property on Sanibel Island that they use as a vacation home in the winter months. The couple hires an attorney to prepare a deed transferring the property to an LLC that they set up to hold the property. The transfer in this case would be subject to the reporting requirements under this new rule, notwithstanding the fact that no formal “closing” has occurred, no money has changed hands, and the beneficial ownership of the property is unchanged.
Compliance and Contract Updates
The Florida Bar and Florida Board of Realtors are expected to release updated “FARBAR” contract forms to address compliance with the new FinCen reporting requirements. These revisions will require buyers to provide the necessary information to the closing or settlement agent at or prior to closing in order to complete the report. The revised FARBAR forms will also require that the buyer pay the cost and fees associated with the closing agent submitting the report.
If you are looking to transfer a piece of residential property into an entity or are looking to purchase a residential property in an entity, be prepared to supply the documentation necessary for the provider of real estate services to report the transaction and expect additional charges to be imposed on buyers to comply with the reporting requires.
Bottom Line
Given the breadth of the new rule, residential property owners, investors, and real estate professionals should evaluate potential reporting obligations well in advance of closing. Transactions that were previously handled as routine internal transfers may now require federal disclosure of beneficial ownership and related information. Careful planning and early consultation with legal counsel can help ensure compliance, avoid unexpected delays, and properly allocate responsibility for reporting costs once the FinCEN rule takes effect on March 1, 2026.