REAL ESTATE PROFESSIONALS TAKE NOTE: NEW REPORTING OBLIGATIONS FOR CERTAIN RESIDENTIAL REAL ESTATE TRANSFERS BEGIN MARCH 1, 2026

Matthew C. Christoph, mchristoph@tuckerlaw.com, (412) 594-5503

Beginning March 1, 2026, detailed reporting will be required for certain transfers of U.S. residential real property under the “Anti-Money Laundering Regulations for Residential Real Estate Transfers” (the “Reporting Rule”) issued by the Financial Crimes Enforcement Network (“FinCEN”) to deter and combat money laundering in the U.S. real estate market.[1]

Although the regulations were issued August 29, 2024, to be effective December 1, 2025, the Secretary of the Treasury issued its “Exemptive Relief Order to Delay the Effective Date of the Residential Real Estate Rule” on September 30, 2025, providing “reporting persons” temporary exemption from the Reporting Rule’s requirements.[2]

Effective March 1, 2026, however, the Reporting Rule’s information gathering, reporting, and related obligations (including retention of certain records or documents) will be enforceable, creating new responsibilities and potential liability for real estate professionals and service providers.

In short, these new regulations provide that a “reporting person” will be required to file a “Real Estate Report” for any “reportable transfer” of “residential real property” (as these terms are defined or established by the Reporting Rule). This article attempts to provide a general explanation of these key terms and a high-level overview of the Reporting Rule, but FinCEN’s Frequently Asked Questions (“FAQs”) and other guidance and materials available at https://www.fincen.gov/rre should be referred to for more substantive and specific explanations.

WHAT IS “RESIDENTIAL REAL PROPERTY”?

Under the Reporting Rule, the term “residential real property” includes any of the following:

• U.S. real property containing a structure principally designed for occupancy by one to four families;
• vacant or unimproved U.S. land where the transferee intends to build a structure principally designed for occupancy by one to four families;
• a unit principally designed for occupancy by one to four families within a structure on U.S. land; or
• shares in a cooperative housing corporation for which the underlying property is in the United States.[3]

WHAT IS A “REPORTABLE TRANSFER”?

A “reportable transfer” under the Reporting Rule is a transfer meeting all of the following criteria:

1. Residential real property is being transferred to a trust or to an entity such as a corporation, LLC, or limited partnership.
2. The transaction is a “non-financed transfer,”[4] meaning any transfer without financing that is both:

(a) secured by the transferred property (for example, by a mortgage or deed of trust); and

(b) extended to all transferees by a financial institution subject to Anti-Money Laundering (“AML”) and Suspicious Activity Reporting (“SAR”) obligations.[5]

Importantly, certain types of trusts or legal entities which are, generally speaking, of a type already subject to state or federal regulation and oversight, such as securities reporting issuers, banks and credit unions, insurance companies, or statutory trusts, are expressly excluded from the coverage of the Reporting Rule.[6]  

If no such exclusion applies to the transferee, a “reporting person” must file a Real Estate Report with FinCEN for any reportable transfer to a trust or legal entity after March 1, 2026—unless one of the exemptions to the Reporting Rule applies.    

WHAT ARE THE EXEMPTIONS TO THE REPORTING RULE?

Certain types of reportable transfers are expressly excluded from the Reporting Rule’s requirements. A Real Estate Report is not required for the following types of transfers of residential real property:  

1. a grant, transfer, or revocation of an easement;
2. transfers from a deceased person pursuant to a will, by provisions of a trust or contract (including testamentary trusts or beneficiary designations), or by operation of law (for example, through intestate succession, to surviving joint owners, or a transfer-on-death deed);
3. transfer incident to divorce or dissolution of a marriage or civil union (including by way of a divorce settlement agreement;
4. transfer made to a bankruptcy estate;
5. transfers supervised by a U.S. court;
6. transfers for no consideration made by an individual, either alone or with their spouse, to a trust of which the individual, their spouse, or both, are the settlors or grantors;
7. transfers to a qualified intermediary in a 1031 like-kind exchange governed by Section 1031 of the Internal Revenue Code and 26 CFR 1.1031(k)-1; or
8. transfers for which there is no reporting person, as determined under the Reporting Rule. [7]

Regarding 1031 exchanges (exemption number 7 on the list above), it is important to  note that FinCEN’s FAQs provide that a transfer of residential real property from a qualified intermediary to an “exchanger” is not within the scope of that exemption and therefore may be a reportable transfer if the exchanger is a covered trust or legal entity.[8]

WHO IS THE “REPORTING PERSON”?

To determine who must file a Real Estate Report where one is required, the Reporting Rule uses a “waterfall” method to determine responsibility.[9] Under the Reporting Rule, the reporting person for a reportable transfer will be one of the following:

1. the closing or settlement agent listed on the closing or settlement statement;
2. if no such person exists, the person that prepared the closing or settlement statement;
3. if none of the above exist, the person filing the deed or instrument of transfer with the local recorder’s office;
4. if none of the above, the underwriter of the transferee’s title insurance policy;
5. if none of the above, the person dispersing the greatest amount of funds related to the transfer—including from escrow, a trust account, or a lawyer’s trust account;
6. if none of the above, the person that provides an evaluation of the status of title; or
7. if none of the above, the person that prepares the deed or other legal instrument transferring ownership.

If no person is involved in any of the roles described above, the transfer is exempt from reporting for lack of a reporting person.[10] But given the broad sweep of this section of the Reporting Rule as applied to modern real estate transactions and industry practice, it is highly unlikely that an otherwise reportable transfer of residential real estate could ever be exempt for lack of a person fitting any of the above specified criteria.

Notably, by written agreement, one who would otherwise be the reporting person for a reportable transfer may designate another to be the reporting person, provided the agreement meets certain requirements under the Reporting Rule.[11]

If an individual would be a reporting person by virtue of employment, agency, or partnership, then the Reporting Rule provides that the reporting person is the individual’s employer, principal, or partnership.[12] If already subject to AML and SAR requirements, however, financial institutions will not be reporting persons under the Reporting Rule.[13]

WHAT MUST BE REPORTED?

The Real Estate Report must contain detailed information such as the legal names, tax IDs or other unique identifying numbers, and addresses for (1) the reporting person, (2) the transferee entity or trust and its “beneficial owners” or trustees, (3) the transferor, (4) each signatory to the transfer, and (5) the real property. Additional information is also required depending on whether the transferee is an entity or a trust, and other facts and circumstances specific to the transaction and parties involved, as further set forth in the Reporting Rule.[14]  The Real Estate Report must also specify the consideration paid (or to be paid) by each transferee and in total for the property; the method of payment; and each payor’s financial institution and account number or the name on any wire, check, or other type of payment from any payor that is not a transferee entity or transferee trust. Information concerning any hard-money loans, private loans, or other lending arrangements that are not extended by a financial institution subject to AML and SAR requirements must also be disclosed in the Real Estate Report. [15] 

Absent knowledge of facts that would reasonably call into question the information being provided to them, reporting persons may rely on information provided by others for purposes of the Real Estate Report, but each beneficial owner of a transferee entity or trustee of a transferee trust must certify that the information provided is accurate and complete to the best of that person’s knowledge.[16]

HOW ARE REPORTS FILED?

Real Estate Reports must be filed electronically via FinCEN’s website by the last day of the month after the month in which closing took place or thirty days after the closing date, whichever is later.[17] Real Estate Reports can be filed free of charge, as an online form, a fillable PDF, or in batches, at https://bsaefiling.fincen.gov/.https://bsaefiling.fincen.gov/. Reporting persons should note that they will not have access to previously filed reports, so a transcript should be saved at the time of filing if retention of reports is desired. 

Copies of certifications regarding beneficial ownership from any transferees (or their authorized representatives) must be retained by reporting persons for a period of five years.  There is a five-year retention requirement for all parties to any reporting person designation agreement, as well. Retention of the Real Estate Report itself or related identifying documents is not required by the Reporting Rule, but practitioners should consider whether  other retention requirements may apply, or if secure retention of reports or other records is worthwhile nevertheless.[18]

WHAT ARE THE PENALTIES FOR VIOLATING THE REPORTING RULE?

The potential penalties for failure to comply with the rule are substantial. Negligent violations could result in civil penalties of $1,430 or more for each violation, with an additional penalty of $111,308 for a pattern of negligent activity. Willful violations carry potential civil penalties ranging from $71,545, up to a current maximum limit of $286,184, and potential criminal penalties for willful violations could be up to five years imprisonment, a criminal fine up to $250,000, or both.[19]

LOOKING AHEAD

For real estate, title, and closing service providers, now is the time to assess how this new reporting requirement will impact your practices and procedures. Ensure your team is fully aware of the obligations under the Reporting Rule, begin developing internal processes to guarantee compliance, and keep current on any developments in the interim. Whether you are a real estate professional, advisor, or service provider, staying ahead of these regulations is crucial to avoiding penalties and maintaining your reputation.

Reach out to Matthew Christoph at (412) 594-5503 or mchristoph@tuckerlaw.com or any one of our Real Estate Group attorneys today to discuss how we can assist you in navigating this complex and dynamic regulatory landscape.

[1] 31 C.F.R. § 1031.320.

[2] Exemptive Relief Order to Delay the Effective Date of the Residential Real Estate Rule, U.S. Dep’t of the Treasury (Sept. 30, 2025), https://www.fincen.gov/system/files/2025-09/RRE-Rule-Exemptive-Relief-Order-508.pdf.

[3] 31 C.F.R. § 1031.320(b)(1).

[4] Id.

[5] § 1031.320(n)(5).

[6] § 1031.320(n)(10)–(11); § 1010.380(c)(2).

[7] § 1031.320(b)(2).

[8] See FAQ E.6, Residential Real Estate Reporting Frequently Asked Questions, FinCEN (last visited February 17, 2026), https://www.fincen.gov/system/files/shared/RREFAQs.pdf. 

[9] See 31 C.F.R. §1031.320(c)(1)(i)– (vii).

⁹ See § 1031.320(b)(2)(viii).

[11] § 1031.320(c)(4).

[12] § 1031.320(c)(2).

[13] § 1031.320(c)(3).

[14] § 1031.320(d)–(g).

[15] § 1031.320(h).

[16] § 1031.320(k).

[17] § 1031.320(k)(3).

[18] § 1031.320(l); see also FAQs K.1–K.3, Residential Real Estate Reporting Frequently Asked Questions, FinCEN (last visited February 17, 2026), https://www.fincen.gov/system/files/shared/RREFAQs.pdf.

[19] See 31 U.S.C. § 5321; 31 C.F.R. § 1010.821; 31 U.S.C. § 5322.