Updated October 2025
Buying or selling property through an LLC, trust, or other entity?
If you’re closing with cash, you’re now on the radar of the Financial Crimes Enforcement Network (FinCEN) — the U.S. Treasury agency that enforces anti-money-laundering (AML) laws.
In August 2024, FinCEN published the final Anti-Money Laundering Regulations for Residential Real Estate Transfers rule in the Federal Register (89 FR 70258).
👉 Read the full rule here on federalregister.gov
Originally set to take effect December 1, 2025, FinCEN postponed implementation until March 1, 2026 to give the industry more time to prepare.
👉 See FinCEN’s postponement notice (Sept 30, 2025)
What the Rule Actually Does
This new rule — called the Residential Real Estate Rule (RRE Rule) — expands federal AML oversight to cover certain non-financed property transfers.
In plain English:
If a home, condo, or residential lot is sold for cash to an LLC, corporation, or trust, the closing professional must file a detailed report with FinCEN identifying the real people (beneficial owners) behind that entity.
Who Must File the Report
FinCEN created a “reporting cascade” to decide who’s responsible:
The settlement agent or title/escrow company (if listed on the closing statement),
If none, then the person who prepares the closing documents,
Next, the person who records the deed, and
Finally, others involved, if necessary.
Only one report per transaction is required, but everyone in the cascade must ensure it gets done.
What the Report Includes
The Real Estate Report (RER) is several pages long — more than 100 questions — and must include:
The property address and value,
Information about the buyer (entity or trust) and seller,
Beneficial owners (names, birth dates, addresses, ID numbers),
Details of how the purchase was funded (cash, wire, check, etc.),
Information about the closing agent and transaction timeline.
These reports are filed directly with FinCEN, not the IRS.
What’s Covered
Residential property (1–4 family dwellings, condos, co-ops, or land intended for residential construction)
Non-financed transfers — meaning the buyer did not use a bank or lender subject to AML rules
Buyers that are entities or trusts, not individuals
What’s Not Covered
Purchases by natural persons (individuals buying in their own names)
Transactions with mortgage financing from a regulated bank
Transfers due to death, divorce, or bankruptcy
Transfers to government bodies or certain public entities
When It Must Be Filed
Purchases by natural persons (individuals buying in their own names)
The reporting party has until the last day of the month following the closing, or 30 days after closing, whichever is later.
They must keep supporting documentation for five years.
What Are GTOs — and How They Connect
Before rolling this out nationwide, FinCEN tested the system using Geographic Targeting Orders (GTOs) — temporary AML reporting requirements in specific metro areas known for high-value cash deals.
The Basics
What they are: Temporary (180-day) orders requiring title insurance companies in certain cities to collect and report ownership info for all-cash purchases of residential property by entities.
Thresholds: Usually $300,000+ (as low as $50,000 in Baltimore).
Areas covered: New York, Miami, Los Angeles, San Francisco, Chicago, Dallas–Fort Worth, Seattle, Washington D.C., and more.
Who reports: Title insurance companies and their agents.
Goal: Identify the real people behind shell companies and trace illicit funds.
👉 View FinCEN’s GTO FAQs and covered metros
The RRE Rule is effectively a nationwide expansion of the GTO framework.
GTOs remain active until the new rule officially takes effect in 2026.
Why FinCEN Is Doing This
For years, federal investigators have seen luxury homes and investment properties purchased through anonymous shell companies — often with cash — as a tool for money laundering and tax evasion.
By collecting beneficial-owner data on these transactions, FinCEN aims to:
Detect and deter money laundering through real estate,
Expose opaque ownership chains, and
Protect legitimate investors and consumers from market distortion.
What This Means for You
For Real-Estate Investors
If you buy in cash through an LLC, trust, or partnership, expect to provide:
Legal documents for your entity or trust,
Names, addresses, and ID information for beneficial owners, and
Funding details (source of cash, bank wires, etc.).
Even though the rule is delayed until March 2026, title companies are already preparing to collect this data — so don’t be surprised if your closer asks for it early.
For Title & Closing Agents
You’re the likely “reporting person.”
Use the next few months to:
Train staff on the RRE Rule and GTO requirements,
Create secure systems for collecting and storing owner information,
Update closing checklists and client communications,
Review FinCEN’s RER form and guidance.
For Hard-Money and Private Lenders
FinCEN is paying close attention to cash and private-capital flows.
Keep records of your funding sources and your borrower’s entity structure to avoid scrutiny.
Penalties and Compliance
Failure to file a required Real Estate Report — or filing one with false information — falls under the Bank Secrecy Act.
Penalties can include:
Civil fines up to $500 per day (for ongoing violations),
Larger civil penalties for willful violations, and
Criminal penalties up to $250,000 and five years in prison for intentional non-compliance.
✅ Action Steps Now
✔️ Ask your title company if your area is currently covered by a GTO.
✔️ If you close cash deals, start collecting ownership and funding documentation now.
✔️ Bookmark FinCEN’s Residential Real Estate Rule page.
✔️ Review the Federal Register rule summary.
✔️ Keep clean, auditable records for every entity-based closing.
Bottom Line
The GTOs = localized AML reporting for all-cash entity purchases (still active).
The RRE Rule = the nationwide version, effective March 1, 2026.
The goal = more transparency, fewer shell companies, and a cleaner U.S. property market.
Real-estate investors and professionals who understand these changes early will be better equipped — and less frustrated — when FinCEN’s new requirements officially hit. And we know that industry professionals are working hard to fight this rule, which is why we have the delay to March. Maybe we will have the on again off again see saw with the BOIR with the CTA previously.
Disclaimer: This article is for educational purposes only and does not constitute legal or tax advice. Always consult your attorney, CPA, or compliance professional regarding your specific situation.
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