FinCEN Anti-Money Laundering Rules

Important: FinCEN's New Anti-Money Laundering Rule: What You Need to Know

Overview of Updated AML Rules

On March 1, 2026, the Financial Crimes Enforcement Network (FinCEN) will enact a new regulation aimed at curbing money laundering through real estate transactions. The rule requires title companies and other professionals involved in property closings and document preparation to report detailed information on all-cash purchases made by legal entities or trusts. This includes the names, addresses, birthdates, citizenship status, and identification numbers of all individuals involved, as well as payment details and ownership structures. The regulation is designed to increase transparency and prevent the use of anonymous real estate purchases to conceal illicit funds. FinCEN estimates that the rule will impact approximately 11% of real estate transactions across the United States.

Real estate professionals should familiarize themselves with FinCEN’s upcoming anti-money laundering regulation now to avoid disruptions in transactions and ensure compliance. The rule introduces new reporting requirements which could directly impact closings and client documentation. Understanding the details early allows professionals to update workflows and communicate clearly with clients—especially those using LLCs or trusts—so deals proceed smoothly once the regulation takes effect on March 1, 2026.

10 Simplified Most Important Compliance Topics

Covered Transactions

The rule targets non-financed residential real estate transfers, primarily all-cash purchases made by legal entities or trusts with no minimum purchase price threshold.

Reportable Properties

Includes single-family homes, condos, townhomes, co-ops, apartment buildings, and vacant land intended for 1–4 unit residential construction. *Additional property types could be identified when the final ruling is announced.

Nationwide Scope

Applies across all U.S. states, Washington D.C., Puerto Rico, and Native American lands, making it a uniform federal requirement.

Responsible Parties for Reporting

Typically, the settlement agent (e.g., title or escrow company) is responsible for submitting the report, unless another party is designated.

Required Information

Reports must include property details, buyer and beneficial owner identities, funding sources, and payment methods. Exact requirements will be established with the final ruling.

Beneficial Ownership Disclosure

Beneficial ownership refers to individuals who ultimately own or control a legal entity, even if their names do not appear on formal ownership documents. FinCEN defines a beneficial owner as any individual who exercises substantial control over the entity or owns or controls at least 25% of the entity’s ownership interests.

Recordkeeping Requirements

The reporting person must retain records related to the Real Estate Report for at least five years. This includes the report itself, supporting documentation used to verify identities and ownership, designation agreements made between professionals. Other real estate businesses involved in the transaction may also have retention obligations.

Definition of a Non-Financed Transfer

A non-financed transfer is one that does not involve a loan secured by the property from a financial institution that is subject to AML (Anti-Money Laundering) and Suspicious Activity Report (SAR) requirements.

Exemptions Exist

Certain types of transfers may be exempt, such as gifts or transfers between family members, but professionals must understand the nuances to avoid misreporting.

Penalties for Non-Compliance

Failure to comply can result in civil penalties and criminal charges, including fines and potential imprisonment for willful violations.

Implementation Timeline

March 1, 2026: The new FinCEN Rules are currently set to take effect on March 1st, 2026.