Starting March 1, 2026, certain residential real estate transactions will require reporting to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
What’s the Point of the Rule?
It has been discovered that legal entities and trusts may purchase residential property for money laundering purposes, which can distort markets and disadvantage legitimate buyers and sellers.
Which Transactions Must be Reported?
A transaction will need to be reported if the property is residential, the transfer is non-financed, the property is transferred to a certain type of entity or trust, and no exception applies.
Who Files the Report?
It will usually not be the responsibility of a real estate license holder to file the report. In most cases, the report will be filed by the closing or settlement agent through a title company or another real estate professional involved in the settlement of the transfer of the property.
If you have a transaction closing on or after March 1, reach out to the title company to determine whether your client is subject to the new reporting requirements and inform the clients prior to closing.
Where Can I Get More Information?
Visit the Residential Real Estate Reporting pages on fincen.gov for details about the rule, a guide to rule exceptions, what must be in the report, and answers to other common questions.
It is imperative that you are aware of these new reporting requirements in case your clients have questions. It’s possible that title companies may delay closing to obtain the necessary information to complete the report. In addition, some title companies may request payments for the costs to prepare and file these reports.
Texas REALTORS® will continue to monitor, engage, and keep you updated on any new developments to the Residential Real Estate Rule and its implementation.