Effective March 1, 2026
Federal law requires that certain residential real estate transactions purchased with all cash or without institutional lender financing, where at least one buyer/transferee is:
- a legal entity
- a limited liability company
- a corporation
- a partnership
- a Trust, Trustee or other non-natural person
be reported to the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
The reporting process requires the completion of forms and the gathering of information about the buyer, seller, premises and the source of the buyers’ funds to acquire the subject premises etc.
The Regulation applies to all Cash Purchases and No Consideration Transactions by:
Transferee Entity – A transferee entity may be a corporation, partnership, estate, association, or limited liability company.
Transferee Trust – any legal arrangement created when a person places assets under the control of a Trustee for the benefit of one or more persons or for a specific purpose, as well as any legal arrangement similar in structure or function, whether formed under the laws of the United State or a foreign jurisdiction
The form collects information necessary to comply, including information about the transferee including:
- Their legal name
- Current Address
- IRS Taxpayer Identification Number
It also requires reporting each beneficial owner – a beneficial owner of a Transferee entity is someone who
- Exercises substantial control over the transferee entity; or
- Owns or controls at least 25% of the transferee entity’s ownership interest. This includes the full legal name, date of birth, current residential street address, citizenship and IRS Taxpayer Identification Number.
Transaction Exemptions:
All Transactions must be reported except if:
- The buyers are obtaining mortgage financing from a licensed mortgage lender
- If the buyer is a natural person.
- Transfer made by an individual for no consideration to a trust which the individual(s) are the settlors or grantors of the trust.
Residential Real Estate as defined in the Rule is:
- 1-4 Family Structure
- Vacant land with the intent to build a 1-4 Family Structure
- A 1-4 family unit (Condo / Co-Op) or
- Co-Op shares.
Reporting Person Cascade:
- The person listed as the closing or settlement agent on the closing or settlement statement for the transfer.
- The person that prepares the closing or settlement statement for the transfer.
- The person that files with the recordation office the deed or other instrument that transfers ownership of the residential real property.
- The person that underwrites an owner’s title insurance policy for the transferee with respect to the transferred residential real property, such as a title insurance company.
- The person that disburses in any form, including from an escrow account, trust account, or lawyers’ trust account, the greatest amount of funds in connection with the residential real property transfer.
- The person that provides an evaluation of the status of the title.
- The person that prepared the deed or, if no deed is involved, any other legal instrument that transfers ownership of the residential real property, including with respect to shares in a cooperating housing corporation, the person who prepared the stock certificate.
If there is no person involved in a transaction performing any of these functions, then a report will not be required.