Companies, trusts, family offices, private investors, developers, and real estate investment vehicles acquiring U.S. residential property without bank financing will soon face a new federal reporting requirement. Title companies, settlement agents, escrow providers, and real estate attorneys involved in closings may also be directly affected.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has adopted a new Residential Real Estate Reporting Rule (the “RRE Rule”) under the Bank Secrecy Act. Beginning March 1, 2026, certain non-financed transfers of U.S. residential real property to legal entities and trusts must be reported to FinCEN.

This rule is designed to address perceived money laundering risks in all-cash and entity-based residential real estate transactions and represents a significant expansion of federal reporting obligations in the real estate sector.

When Does the Rule Apply?

The RRE Rule applies to a “reportable transfer,” which generally includes:

1. A transfer of an ownership interest in U.S. residential real property
2. Where the transferee is a legal entity (such as an LLC, corporation, or partnership) or a trust
3. And the transfer is non-financed, meaning it is not funded by a loan from a financial institution subject to federal anti-money laundering program and Suspicious Activity Report obligations

Residential real property includes one-to-four family homes, townhouses, condominiums, cooperative housing units, and certain vacant land intended for residential construction.

In practical terms, many all-cash acquisitions of residential property by LLCs, partnerships, and trusts will fall within the scope of the rule.

Are There Exemptions?

Yes. The rule contains several exemptions, including certain transfers:

1. Incident to death, divorce, or bankruptcy
2. Supervised by a court
3. Involving specific estate planning structures with no payment
4. Involving certain highly regulated entities

The applicability of an exemption depends on precise regulatory definitions. Transaction participants should evaluate exemption eligibility carefully before assuming reporting is not required.

Who Must Report?

The reporting obligation does not fall directly on the buyer or seller. Instead, the rule establishes a hierarchy of “reporting persons,” generally beginning with the settlement or closing agent and cascading to other transaction participants if necessary.

In many transactions, the reporting party will be:

1. A title company or title insurance agent
2. A settlement or escrow agent
3. A real estate attorney handling the closing

Parties may enter into a written designation agreement assigning reporting responsibility among eligible participants.

Because reporting responsibility depends on transactional roles and documentation, professionals involved in closings should review internal processes well before the March 2026 effective date.

What Information Must Be Reported?

The Real Estate Report, filed through FinCEN’s BSA E-Filing System, requires information concerning:

1. The reporting person
2. The property and closing date
3. The transferor (seller)
4. The transferee entity or trust
5. The beneficial owners of the transferee, including individuals who exercise substantial control or hold significant ownership interests
6. Certain payment details

As a result, entities and trusts acquiring residential real estate should expect to provide detailed ownership and control information as part of the closing process.

Filing Deadline and Recordkeeping

A required report must be filed no later than the later of:

1. 30 calendar days after closing, or
2. The last day of the month following the month of closing

Reporting persons must retain certain related records, including beneficial ownership certifications and any designation agreements, for five years.

Consequences of Non-Compliance

Failure to comply may expose reporting persons to civil penalties and, in cases of willful violations, potential criminal liability under the Bank Secrecy Act.

Given the federal enforcement framework and FinCEN’s increased focus on real estate transparency, compliance planning should not be deferred until the rule’s effective date.

Practical Considerations for Market Participants

This rule is particularly relevant for:

1. Private investors and family offices acquiring residential property through LLCs or trusts
2. Real estate developers and sponsors using special purpose entities
3. Cross-border investors purchasing U.S. residential property without institutional financing
4. Title companies, escrow agents, and attorneys handling closings for entity purchasers

Entities planning acquisitions in 2026 and beyond should anticipate additional documentation requests and timing considerations in closing workflows. Real estate professionals should evaluate whether current intake procedures, beneficial ownership certifications, and internal compliance protocols will satisfy the new requirements.

Conclusion

FinCEN’s Residential Real Estate Reporting Rule introduces a new federal compliance layer for non-financed residential real estate transactions involving entities and trusts, effective March 1, 2026.

Participants in the residential real estate market who rely on entity structures or all-cash acquisitions should assess now whether upcoming transactions will fall within the rule’s scope and how reporting responsibilities will be allocated.

Careful planning in advance of the effective date can reduce transaction friction and regulatory exposure.