Understanding the Delay of FinCEN's Real Estate Rule to 2026

In a recent update, the Financial Crimes Enforcement Network (FinCEN) has moved the deadline for mandatory reporting under the Residential Real Estate Transfer Rule to March 1, 2026. This delay, facilitated through exemptive relief, relieves concerned parties from filing reports until the new date.

The Focus of the Rule

This regulation addresses non-financed transactions of residential properties where the transferee is a legal entity or trust. It primarily encompasses one-to-four family homes, condos, and co-ops, while excluding commercial real estate and transactions involving financial intermediaries under the Bank Secrecy Act (BSA). Mixed-use properties may fall under the rule’s jurisdiction if certain criteria are met.

Role of the "Reporting Person"

The rule introduces the concept of a “reporting person” — typically the individual or entity responsible for closing services in relevant transfers. This could be an escrow agent, title company, or in specific regions, a closing attorney. Determining the responsible filer before closing is essential to ensure accurate, timely submissions.

Triggering Transactions and Requirements

Transactions necessitating reports include non-financed transfers to legal entities or trusts, often used to hide beneficial ownership. The rule necessitates detailed disclosures about the property, transfer specifics, the transferee, and beneficial owners, following FinCEN’s Residential Real Estate Report (RER) form instructions.

Preparing for Compliance

As of March 1, 2026, all required reports must be filed within the specific deadlines stated in the rule and the RER form. Firms should familiarize themselves with the form to navigate these requirements, ensuring promptly corrected errors through established procedures.

Electronic Filing and Security

Filings will be managed electronically via FinCEN’s designated system. Reporting entities must secure system access and manage accompanying documentation effectively, adhering to data privacy and security standards mandated by the BSA and applicable state laws.

Maintaining Records and Compliance

Recordkeeping is a pivotal aspect of compliance, with a need to retain records per FinCEN’s specified duration — typically spanning multiple years. This includes maintaining copies of identification, organizational documents, and payment records associated with each transaction.

Identifying Beneficial Owners

Properly identifying beneficial owners is critical. The RER form outlines requirements for gathering information on individuals who own or control the transferee, including names, birthdates, addresses, and identification numbers, with additional details needed for trusts.

Operational Adaptations for Compliance

Legal and title companies should develop protocols to identify potential covered transactions early, assigning reporting responsibilities clearly. Updating engagement letters and checklists to reflect these processes is recommended, alongside mock filings to identify operational gaps pre-compliance date.

Consequences of Non-Compliance

Failure to comply could lead to severe penalties under the BSA. Proper documentation of risk-based procedures, training, and quality controls demonstrates a commitment to compliance, as outlined in the final rule and Federal Register notice.