Nathan Zion | Nov 21 2025 14:00
The Financial Crimes Enforcement Network (FinCEN) has postponed its mandatory reporting requirement for the Residential Real Estate Transfer Rule until March 1, 2026. This delay gives covered professionals additional time, as exemptive relief means reports aren't required until this new date.
This rule targets non-financed residential property transfers, involving legal entities or trusts, meaning properties like single-family homes, condos, and co-ops. Unlike commercial real estate, which isn’t included, only certain mixed-use properties may be relevant. The focus is on transactions without lenders, where money laundering risks might occur due to the lack of a Bank Secrecy Act (BSA) intermediary.
Understanding the Role of Reporting Persons
The regulation introduces the concept of the “reporting person,” who’s usually involved in closing or settlement services, such as escrow agents or title companies. It’s crucial for parties to decide who will fulfill this role to ensure timely reporting.
Triggers for Reporting
The obligation arises with non-financed transfers to entities or trusts, which might obscure ownership. The rule mandates detailed reporting on the property, transfer, and involved parties, including beneficial owners, through FinCEN’s Residential Real Estate Report (RER) form.
Compliance by 2026
All filings are due post-March 1, 2026, in accordance with FinCEN’s submission guidelines. Firms should closely follow form instructions to ensure deadlines are met and corrections to submitted reports are promptly handled using the prescribed procedures.
Electronic Filing and Data Security
All reports must be filed online via FinCEN’s system, necessitating appropriate access for all supporting documents. Due to the sensitive nature of the information, adhering to BSA privacy and security standards, alongside state laws, is imperative.
Recordkeeping Requirements
Filers are required to maintain copies of reports and related records for a period specified by FinCEN. Common BSA protocols necessitate long-term retention of documents, such as identity verification and payment records, necessitating integration with existing file management systems.
Identifying Beneficial Owners
Part of the rule demands gathering detailed information on individuals who control the entity or trust accepting the property transfer. This includes obtaining and verifying data like names, addresses, and identification numbers, especially when trusts are involved.
Preparation and Compliance
As the reporting duty generally lies with settlement professionals, early identification of potential covered transfers is essential. Engagement documents and checklists should reflect compliance tasks and processes, with mock filings encouraged to identify procedural issues.
Non-compliance risks include civil or criminal BSA penalties. Firms must document robust, risk-based procedures and quality checks to demonstrate adherence, aligning with the enforcement framework outlined in the Federal Register.
