FinCEN Residential Real Estate Rule

By Stephen McCoy, Vice President of Legal Services & Regulatory Affairs

Effective March 1, 2026, certain transfers of real estate will require reporting sensitive information to the federal government, potentially adding new speed bumps or delays to your closings.

The Financial Crimes Enforcement Network, known as FinCEN, will now require real estate professionals who handle closings and settlements to submit reports about the buying entity. This will largely impact title companies as they are traditionally hired to handle closing and settlement services in Ohio. However, it is still critical for REALTORS^® to get ahead of the rule so your closing isn’t disrupted or delayed. This rule was originally scheduled to go into effect in December 2025, but was delayed as a result of pending litigation. However, the rule is now scheduled to go into effect on March 1^st, 2026.

Which transactions are affected?

This is a critical framework for understanding whether this rule will impact your transaction. A transaction that meets all four requirements will likely require reporting:

1. The property is residential
2. The buyer is not obtaining financing (paying cash)
3. The buyer is an entity, like an LLC or a trust
4. There are no exemptions that apply

There are also a number of exemptions, such as a transfer resulting from a divorce or a transfer from an owner to their own trust.

Who handles the reporting to FinCEN?

FinCEN includes a helpful and detailed “reporting cascade” list to define who is responsible for filing the report, some of which is based on who does what as part of the closing. However, the closing or settlement agent listed on the settlement statement is given first priority. The next responsible parties are based on functions traditionally performed by title companies acting as closing agents, such as preparing closing documents, issuing title insurance and so on. These entities will often be the best situated party to perform this task, so leave it to the professionals. It’s unlikely that a real estate brokerage would be responsible for filing the report, unless that brokerage conducts one of the activities on the list and there are no reporting entities higher in the cascade.  

What Do REALTORS^® Need To Know?

While other third parties will typically handle the reporting, it is still critical for REALTORS^® to inform their clients of this new change, particularly if they are a cash-buyer using entities. Most investors use entities to purchase property, and with cash, so their transactions will more often trigger the requirement.

Consider talking with your local title companies and attorneys who handle closings to understand their process and requirements under this new rule. Also, discussing this rule with your clients is recommended to prepare them to provide the necessary information to the reporting entity. Similar to situations where your clients may incur FIRPTA requirements, recognizing the transaction to inform your clients is imperative.

You can learn more about this rule and how it could impact your clients at www.fincen.gov/rre, as well as some useful information from the National Association of REALTORS^®.

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