A new federal rule aimed at preventing money laundering in residential real estate is now in effect.
Under the rule, when a trust or legal entity purchases residential property without financing (including all-cash sales or transactions involving non-regulated lenders), closing or settlement agents must submit a report to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The report must include identifying information about the entity’s beneficial owners, such as names, addresses, and Social Security numbers, and must be filed within 30–60 days after closing. If no closing agent is involved, responsibility follows a designated line of succession.
Real estate agents and brokers are not responsible for filing the reports, but they will be educating their clients about the new requirements. Title companies and closing attorneys are unlikely to close affected transactions without the required information.
FinCEN says the reports will be stored securely and not made public. The goal is to prevent illicit actors from using entities, trusts, and all-cash purchases to conceal identities and launder money.
FinCEN estimates the rule will apply to approximately 800,000–850,000 transactions annually. The rule was originally set to take effect in December 2025 but was delayed to allow for industry preparation. It recently survived a legal challenge, with a federal judge ruling that FinCEN acted within its authority.
For more info, visit the FinCEN FAQ page HERE.