FinCEN Reporting Rules Now in Effect: What you need to know
On March 1, 2026, the Residential Real Estate Rule (Rule) became effective. This Rule will require specific professionals involved in real estate closings to submit reports to the Financial Crimes Enforcement Network (FinCEN) regarding certain non-financed transfers of residential real estate to legal entities or trusts.
WHAT kind of transactions fall under this Rule?
The non-financed transfer of residential real property to a transferee entity or transferee trust that would not otherwise be exempt.
WHO is responsible for filing the report?
The Rule itself sets forth a reporting cascade which is used to determine the reporting person for the transfer. The reporting cascade is as follows:
- The person listed as the closing or settlement agent on the closing or settlement statement;
- If no person described above is involved, the person that prepares the closing or settlement statement for the transfer;
- If no person described above is involved, the person that files with the recordation office the deed or other instrument that transfers ownership of the residential real property;
- If no person described above is involved, the person that underwrites an owner’s title insurance policy for the transferee with respect to the transferred residential real property, such as a title insurance company;
- If no person described above is involved, the person that disburses in any form, including from an escrow account, trust account, or lawyers’ trust account, the greatest amount of funds in connection with the residential real property transfer;
- If no person described above is involved, the person that provides an evaluation of the status of the title; or
- If no person described above is involved, the person that prepares the deed or, if no deed is involved, any other legal instrument that transfers ownership of the residential real property, including, with respect to shares in a cooperative housing corporation, the person who prepares the stock certificate.
NOTE: It is unlikely that a real estate licensee would be the reporting party unless they fall into one of the categories noted above.
WHY was this Rule enacted?
The purpose of this rule is to combat and deter money laundering and increase transparency in the U.S. residential real estate market.
Additional information is available on the FINCEN site.
About the writer: Prior to joining Illinois REALTORS® in 2022, Victoria (Vicki) Munson was an attorney in private practice focusing on real estate and estate planning matters. She enjoyed assisting buyers and sellers in bringing their transactions to the closing table. Victoria earned her bachelor’s degree from Western Illinois University and her Juris Doctor from The John Marshall Law School.
