Legal Corner

FinCen - Federal Reporting

Beginning March 1, 2026 – New Federal Reporting Rules Go Into Effect

Starting March 1, 2026, new federal reporting requirements will apply to certain real estate transactions across the country.

If you represent buyers or sellers — especially where legal entities, trusts, or non-traditional ownership structures are involved — this is something you’ll want on your radar now.

What’s Changing

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) is implementing expanded anti-money laundering (AML) reporting rules for qualifying real estate transactions.

In plain terms, certain closings will now require additional reporting about the individuals behind purchasing entities — including beneficial ownership information — even in transactions that may not involve traditional financing.

This reporting:

• Is mandatory under federal law

• Applies to certain residential real estate transfers involving entities or trusts

• Requires collection of detailed ownership information

• Must be submitted within strict federal deadlines

• Carries potential civil and criminal penalties for non-compliance

Why This Matters to Realtors®

While much of the reporting responsibility will fall on the designated “reporting person” in the transaction, Realtors® should be aware of how this may impact timelines and client expectations.

The biggest risks we anticipate are:

• Last-minute delays if ownership information isn’t collected early
• Confusion when entity buyers are required to disclose personal ownership details
• Sensitive conversations about privacy and federal compliance
• Increased documentation in certain cash or entity transactions

Understanding the rule now allows you to set expectations early and keep your transactions moving smoothly.

What Types of Transactions Are Most Likely to Be Affected?

While the final rule contains detailed definitions, it generally targets:

• Certain residential transfers

• Transactions involving LLCs, corporations, partnerships, or trusts

• Deals without traditional bank financing (including some cash transactions)

Traditional mortgage transactions through regulated lenders may not trigger the same reporting requirements, since banks already operate under federal AML frameworks.

What You Should Do Now

• Begin identifying entity buyers early in the transaction
• Encourage clients to be prepared to provide ownership information if required
• Work with closing partners who understand federal compliance procedures
• Allow additional lead time when legal entities are involved

Proactive planning will prevent surprises.