The Financial Crimes Enforcement Network has adopted a nationwide rule that requires reporting for certain transfers of residential real estate. The rule focuses on non‑financed transfers to legal entities or trusts. It is designed to increase transparency and deter money laundering in real estate.
Colorado Real Estate Documents and Notary Services will not act as the reporting party for any transaction. There are no exceptions. The responsible party will be designated in writing for each covered transfer.
FinCEN’s Residential Real Estate Rule requires certain persons involved in closings and settlements to submit a Real Estate Report for covered transfers. The aim is to reveal the people behind entities and trusts that acquire residential property without institutional financing. This is because all‑cash and similar transactions have been used to hide illicit funds.
Industry guidance indicates March 1, 2026 as the key operational start date for reporting in the real estate sector. FinCEN has also published a fact sheet that reflects an effective date of December 1, 2025 for the rule framework. Plan for reporting on or after March 1, 2026.
A transfer is reportable if all three conditions are met.
Colorado Real Estate Documents and Notary Services will not act as the reporting party for any transaction. There are no exceptions. The responsible party will be designated in writing for each covered transfer.
FinCEN’s Residential Real Estate Rule requires certain persons involved in closings and settlements to submit a Real Estate Report for covered transfers. The aim is to reveal the people behind entities and trusts that acquire residential property without institutional financing. This is because all‑cash and similar transactions have been used to hide illicit funds.
Industry guidance indicates March 1, 2026 as the key operational start date for reporting in the real estate sector. FinCEN has also published a fact sheet that reflects an effective date of December 1, 2025 for the rule framework. Plan for reporting on or after March 1, 2026.
A transfer is reportable if all three conditions are met.
- The property is residential real property. This includes single family homes, condos, townhomes, cooperatives, and certain land intended for future residential construction. Mixed use property can be included if the residential element fits the definition.
- The transfer is non‑financed. If there is no loan by a financial institution that already has AML program and suspicious activity reporting duties, the transfer is non‑financed. Private or seller financing will often be treated as non‑financed for this rule.
- At least one transferee is a legal entity or trust. Examples include LLCs, corporations, partnerships, and domestic or foreign trusts. Direct transfers to individuals are not reportable under this rule.
No. If the transferee is only an individual person, this rule does not apply. Coverage turns on transfers to entities or trusts.
The rule excludes or exempts certain transfers. Common examples include transfers of easements, transfers resulting from death, divorce related transfers, transfers into a bankruptcy estate, transfers supervised by a U.S. court, certain transfers for no consideration to qualifying trusts, and 1031 exchanges that involve a qualified intermediary. Facts matter and this is not a complete list.
FinCEN’s rule assigns reporting duties to persons involved in closing and settlement, but it allows a designation of who will file. For our clients, Colorado Real Estate Documents and Notary Services will not file the report for any transaction. There are no exceptions. The Grantee or Transferee will be designated as the reporting party for covered transfers. We do not advise on whether your transfer is reportable or exempt.
Expect to provide the following if your transfer is covered.
- Property address, consideration, and payment details
- Transferor information
- Transferee entity or trust information, including tax identification where required
- Beneficial ownership information for individuals who own or control 25 percent or more of the transferee entity or trust. FinCEN requires this to identify the people behind the entity or trust.
Reports are submitted electronically through FinCEN’s BSA E‑Filing System. To file, the reporting party will create a Login.gov account, create a BSA E‑Filing account, complete the Real Estate Report, and submit it through the portal. Visit FinCEN’s Residential Real Estate page as https://bsaefiling.fincen.gov/
The report is due by the later of the last day of the month following the closing date or 30 days after closing. Timely filing is required.
A beneficial owner is any individual who directly or indirectly owns or controls 25 percent or more of the transferee entity or trust. Identifying these individuals is central to the rule’s purpose.
FinCEN can impose civil and criminal penalties for failing to file when required. Non‑compliance can be costly and can lead to enforcement actions.
• We will provide the designation document that assigns the reporting responsibility to the Grantee or Transferee for covered transactions.
• We will not act as the reporting party. There are no exceptions.
• We will not advise you on whether your transfer is reportable or exempt. The Transferee is responsible for determining applicability and for filing if required.
Sources and further reading
What Should CRE Owners and Investors Know About FinCEN’s New Transaction Reporting Rules?
FinCEN Fact Sheet on the Residential Real Estate Rule
What is this rule and why does it exist
When this starts
Which transactions are covered?
Helpful Links
Federal Register final rule summary, August 29, 2024
Stewart Title information hub and video explainers for the industry start date and practical guidance
Shumaker Client Alert
BSA E-Filing System
Are any transfers exempt?
Who is the reporting party?
What information must be reported?
How and where do you file?
When is the report due?
What is a beneficial owner
What are the penalties for not filing?
What we will and will not do
Quick checklist for the designated reporting party
1. Confirm whether the transfer meets the three coverage conditions and if any potential exemptions that may apply.
2. Create your Login.gov and BSA E‑Filing accounts and log in to FinCEN’s portal.
3. Gather property, party, and beneficial ownership details and submit by the later of the last day of the month following the closing date or 30 days after closing.
