Under the new rules, when a corporation or trust purchases residential property without financing, the closing or settlement agent must report the details of the transaction.
The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) this week introduced new regulations for reporting non-financial real estate transactions purchased through trusts, increasing the amount of paperwork that completion and settlement personnel must complete for certain transactions.
The new regulations go into effect on March 1 and are aimed at curbing money laundering in the United States.
Under the new rules, when a corporation or trust purchases residential real estate without financing or through an unregulated lender, the closing or settlement agent must report transaction details, including information about the corporation or trust involved, the corporation’s owners, the individuals signing documents on behalf of the corporation, the seller, the property being transferred, social security numbers, and payments made.
Reports must be submitted by the last day of the month following the month in which the transactions occurred or 30 days after the closing date, whichever is later.
“While there are many legitimate reasons to use corporations and trusts to own residential real estate, illegal actors intent on laundering money through residential real estate often use corporations and trusts to disguise their identities and make it difficult to identify the proceeds of crime,” FinCEN said on its FAQ page for the report. “Offenders often prefer non-finance transfers of residential real estate (including ‘all-cash’ sales) to avoid the scrutiny of financial institutions that impose anti-money laundering, anti-terrorist financing, and suspicious activity report requirements under the Bank Secrecy Act.”
Although closing and settlement agents primarily have reporting responsibilities rather than real estate agents, the National Association of Realtors (NAR) noted that it is important for real estate agents to be aware of this change so they can educate and prepare buyers about the new reporting protocols.
NAR added that it is unclear how many all-cash home transactions were completed in the U.S. last year by both individuals and corporations, according to the average of NAR’s monthly Realtor Confidence Index, as the association only has a bulk estimate of the number of transactions this will impact. This was about 28% of all buyers. About 22% of residential transactions last year were purchased by entities including trusts, according to NAR.
The proportion of all-cash purchases made by trusts and entities can be higher than the figures for luxury goods transactions, where cash purchases and the use of trusts to maintain buyer privacy are much more common. In the first half of 2025, about half of U.S. homes priced between $2 million and $5 million were purchased with cash, and more than 65% of homes priced between $5 million and $10 million were paid for in full in cash, according to Realtor.com.
To help NAR members better understand the new regulations and best practices, the industry group will host a free webinar with FinCEN officials on Wednesday, March 11th at 2:00 pm ET. NAR also launched a new FAQ page on its website regarding FinCEN’s residential real estate rules.
FinCEN said the person responsible for reporting on a transaction may be determined by the real estate professional involved in the transaction or through a “reporting cascade” developed by the department. This reporting cascade specifies a hierarchy of reporting obligations depending on which real estate professional played what role during the transaction.
The Treasury Department first proposed new reporting rules in early 2024. It was originally scheduled to come into force in December 2025, but was delayed to “give industry time to comply”. The new law has already withstood a court challenge by title insurance companies, who sought to argue that it violates the Fourth Amendment.
“FinCEN’s new reporting requirements will help stop the most egregious money laundering cases through real estate, while giving law enforcement and national security agencies better tools to investigate and address these flows,” Ian Gary, executive director of the Financial Accountability and Corporate Transparency (FACT) Coalition, said in an emailed statement to Inman.
“Those who launder money impoverish their neighbors and impoverish their landlords. In terms of stopping the funnel of dirty cash, this rule may help correct ongoing market distortions in the residential real estate sector caused by money laundering, and may give tenants facing negligent landlords a better chance of being held accountable.”
Email Lillian Dickerson
