What Do FinCEN’s New Residential Real Estate Property Transfer Requirements Mean for You?

By: Amilcar Torres

The U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has finalized the Residential Real Estate Rule (“RRER”) establishing new nationwide reporting requirements for certain residential real estate transactions. Effective March 1, 2026, the RRER expands anti-money laundering oversight into the residential real estate market by requiring reports on certain non-financed transactions involving legal entities or trusts. The RRER also imposes new compliance obligations and changes the current landscape governing certain residential real estate transactions. This alert highlights the key elements of the RRER, including covered transactions, responsible reporting parties, information requirements, deadlines and associated penalties.

Covered Transactions:

A Real Estate Report, must be filed for a transfer that meets all the following conditions:

1. The transaction involves a transfer of residential real property located in the United States;
2. The transfer is non-financed, meaning no financial institution subject to federal Anti-Money Laundering (“AML”) and Suspicious Activity Report requirements (“SAR”) extends credit secured by the property.
3. The property is transferred to a legal entity or trust; and
4. No regulatory exemption applies

A transfer is any transfer of ownership interest in a residential real property that is demonstrated through deed, contract, gift, or other means, regardless of whether consideration is paid. Residential real property broadly includes real property designed for occupancy by one to four families, land intended for construction of such buildings, individual residential units, and cooperative housing. A transaction financed by a lender not subject to AML or SAR obligations is still treated as non-financed and potentially reportable.

Who Must File?

The Reporting Person is the party responsible for filing the Real Estate Report through the Bank Secrecy Act (“BSA”) E-Reporting system. FinCEN established a reporting cascade that assigns reporting responsibility based on which party performs specific settlement or closing functions during the transaction. If multiple parties are involved, the cascade determines which party must be the one to file the Real Estate Report. Alternatively, parties can enter into a designation agreement naming the party who will be responsible for being the Reporting Person and filing the Real Estate Report.

What kind of information will be required?

A Real Estate Report is a thorough online form which will require:

• Property Details
• Identifying Information of the Reporting Person, Transferor, and Transferee legal entity or trust; and
• Ownership information for transferee entities and trusts

A beneficial owner of a transferee entity is any individual who, at closing either (i) exercises substantial control over the entity or (ii) owns or controls at least 25% of the entity’s ownership interest.

Exceptions to Reporting Requirements:

The following non-financed transfer of residential real property are not considered reportable under the RRER:

Category	Exception
Easements	Grant, transfer, or revocation of an easement
Death‑related transfers	Transfers via will, trust, intestate succession, survivorship, transfer‑on‑death deed, or beneficiary designation
Divorce/dissolution	Transfers incident to divorce or civil union dissolution
Bankruptcy	Transfer to a bankruptcy estate
Court‑supervised	Transfer supervised by a U.S. court
Certain trust transfers	No‑consideration transfer by an individual (alone or with spouse) to a trust where the individual and/or spouse is settlor/grantor
1031 exchange	Transfer to qualified intermediary for a like‑kind exchange (IRC §1031)
No reporting person	Transfers where no reporting person exists

 

Exempt Transferee Entities:

The following transferee entities are exempt from reporting requirements under the RRER:

Category	Entity Type
Financial/Regulated	Bank; credit union; depository institution holding company; broker‑dealer; money services business
Securities/Markets	Securities reporting issuer; securities exchange/clearing agency; other Exchange Act‑registered entity
Insurance	Insurance company; state‑licensed insurance producer
Commodities	Commodity Exchange Act‑registered entity
Utilities	Public utility; financial market utility
Investment	Registered investment company
Structural	Subsidiary of an exempt entity
Government	Governmental authority

The following transferee trusts are exempt from reporting requirements:

1. Securities reporting issuer
2. Trustee that is a securities reporting issuer
3. Statutory trust
4. Subsidiary of an exempted trust

Verification Standards

The RRER adopts a reasonable reliance standard allowing Reporting Persons to rely on information provided by other transaction participants unless they have a reason to question its reliability. However, for beneficial ownership information of transferee entities and trusts, reliance is only permitted when the information provided by the transferee (or its representative) and certifies in writing as true and accurate.

Filing Deadlines and Penalties:

Reports must be filed electronically through the BSA E-Filing System by the later of:

• The last day of the month following the month in which closing occurs; or
• 30 calendar days after the day of closing

Reports are maintained by FinCEN and will not be publicly available.

The RRER goes into effect on March 1, 2026 and noncompliance carries significant civil and criminal penalties. Negligent violations may result in civil penalties of approximately $ 1,300 per violation, with additional penalties up to roughly $108,000 for patterns of repeated negligence. Willful violations may lead to criminal fines up to $250,000, imprisonment up to five years, or both.

The RRER is a significant change in the compliance expectations and requirements for residential real estate transactions involving corporations and individuals. Businesses should begin to evaluate internal reporting procedures and reporting duties well in advance of the March 1, 2026 effective date. The Bricker Graydon Wyatt Corporate & Tax and Real Estate Transactions Team are available to advise on how to prepare for RRER implementation and mitigate compliance risk.

*Amilcar Torres is a law clerk and not licensed to practice law.