Reporting to FinCEN is BACK! – The Residential Real Estate Rule

The Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) that created the CTA is back, but not for your business…this time. 

 What is the Residential Real Estate Rule (“RRE”)? A federal rule requiring certain non-financed transfers of residential real estate to legal entities or trusts be reported to FinCEN.

 When does it go into effect? March 1, 2026 [Link].

 How do I know if my transfer needs to be reported? There are three main questions you should ask:

1.  Is the property “residential real property”? This includes 1-4 family houses, townhouses, condominiums, cooperatives, and residential vacant land [Link]; and

2.  Is it “non-financed?” i.e. not a traditional mortgage loan from a bank [Link], this means no financing at all or non traditional financing; and

 3. Is the Buyer an entity or a trust? [Link].

 If you answered “yes” to all three questions, the real estate transfer is generally reportable unless an exemption applies.

 Who files the report?  Depending on the transaction, there may be multiple people who could be the “reporting person”, but only one report is required to be filed.  If you use a title company in your closing process, it will often be them.  The key is to make sure that one of the people involved in the process files the report. [Link]

 Notable Exemptions from reporting: [Link]

• Transfer resulting from the death of an individual
• Transfer incident to divorce
• Transfer for no consideration made by an individual, either alone or with the individual's spouse, to a trust of which that individual, that individual's spouse, or both of them, are the settlor(s) or grantor(s)

 What information gets reported? The reported information falls in seven main categories.

• The reporter
• The Buyer entity or trust
• Beneficial owners and signing individuals (Similar definition to a Beneficial Owner under the Corporate Transparency Act)
• The Seller
• Property information and closing date
• Payment details (amount, payment method, financial institution and account information if any, payor identity)
• Information regarding private loans, if any [Link]

When does the report need to be filed? The report must be filed by the last day of the month following the month in which the date of closing occurred or 30 calendar days after the date of closing, whichever is later. [Link]

 Where do you file a report?  Right here.

 If you want to read more, here is an article from Wisconsin Lawyer magazine: Link