What Real Estate Professionals Need to Know: FinCEN’s New Reporting Rules Hit December 2025
- LeNae Schwickerath
- Sep 23
- 5 min read
Big changes are on the horizon for the U.S. residential real estate industry. Starting December 1, 2025, the Financial Crimes Enforcement Network (FinCEN) will bring into force a sweeping new rule aimed at cracking down on money laundering via real estate transactions. The new rule shifts from localized “Geographic Targeting Orders” (GTOs) to a broad, nationwide reporting regime. Real estate attorneys, title agents, escrow officers, closers, and settlement professionals must understand how these changes will affect their workflows, documentation, and compliance obligations.
In this post, we’ll unpack the core features of the rule, what kinds of transactions are “reportable,” who is responsible, exemptions, implementation challenges, and tips to prepare.
Why the Change?
For years, illicit actors have exploited gaps in real estate transparency, especially by purchasing residential property with “all cash” (i.e. non-financed) and placing ownership in legal entities or trusts to obscure identities. The existing GTOs required title insurers to report certain high-value, all-cash purchases in specific jurisdictions, but they were narrow in scope.
FinCEN’s new rule aims to:
Eliminate geographic and monetary thresholds (i.e. it will apply nationwide to all price levels)
Increase transparency of real estate transactions involving legal entities and trusts (to unmask beneficial ownership)
Deter money laundering, illicit finance, and use of real estate as a vehicle to layer or integrate criminal proceeds into the legitimate economy
In short: what used to be a patchwork of rules in big cities will become a uniform national standard.
Key Elements of the Final Rule
Below is a breakdown of the most important features of the rule.
What Transfers Are Reportable?
A transfer is reportable if it meets all of these criteria:
Residential real property.This includes 1–4 family homes, townhomes, condominiums, co-ops, vacant land intended for residential development, and even some mixed-use buildings (if part is residential).
Non-financed transfer.The buyer is not relying on a loan from a financial institution that is subject to AML / SAR obligations. In simpler terms, cash deals or privately financed deals that do not involve regulated lenders.
Transferee is a legal entity or trust.If the property is transferred to an LLC, corporation, partnership, or trust (or similar non-individual vehicle), then it qualifies—unless an exemption applies.
No applicable exemption.The rule contains various exemptions (discussed below). If a transfer qualifies for one of those, it would not be reportable.
Notably, there is no minimum dollar threshold—even relatively modest transactions, if they meet the criteria, must be reported.
What Information Must Be Reported?
When a transfer triggers the rule, the reporting person must collect and report (among other things):
Identity and contact information of the reporting person (the individual responsible for filing)
Information about the transferee entity or trust (name, address, formation info)
Beneficial owners of the transferee (e.g. individuals holding at least 25 % ownership, or having significant control)
Individuals acting on behalf of the transferee (e.g. signing documents)
The transferor (seller) identity and information
Details of the property: address, type, description, and other relevant identifiers
Consideration / purchase price and payment information (how the deal is funded)
FinCEN has indicated that the draft reporting form contemplates over 100 data fields.
There is also a “reasonable reliance” standard: reporting persons may rely on information provided by others (e.g. transferee or their representative), so long as there is no reason to doubt its reliability.
Who Is the “Reporting Person”?
One of the more intricate parts of the rule is identifying who must file the report. FinCEN establishes a cascade of priority among parties performing closing or settlement tasks:
The person listed as the closing or settlement agent on the closing statement
If no one in, then the person listed as preparing the closing/settlement statement
If no one in, then the person who records or files the deed or transfer instrument
And so on, through related parties, as prescribed in the rule
However, parties may deviate from that default cascade by executing a designation agreement—a written agreement by which one party agrees to assume reporting responsibilities (and the original “would-be reporting person” agrees to relinquish it).
Keep in mind: the reporting person must keep records (for five years) of beneficial ownership certifications, designation agreements, and related documentation.
Timing & Filing Deadlines
Once a transfer is reportable and the reporting person is identified, the deadline to file:
The later of (i) the final day of the month following the closing month, or (ii) 30 calendar days after closing.
Note also that the reporting person must maintain records (certificate of beneficial ownership, etc.) for five years.
Exemptions & Not Reportable Transfers
Some transfers are explicitly not subject to reporting. Examples include:
Transfers due to death, divorce, or bankruptcy
Transfers under court supervision
Transfers of easements
Qualified intermediaries in “like-kind” exchanges (under Section 1031)
Transfers involving certain exempt entities (banks, insurance companies, public utilities, registered securities firms, etc.)
Some transfers to trusts or entities that are themselves exempt
Transactions for which there is no reporting person under the cascade rules
It’s critical to review the full rule language to confirm whether a particular transaction qualifies for an exemption.
Implications & Challenges
This is a major shift for the real estate industry. Some of the challenges and implications include:
Increased compliance burden. Many transactions that were previously unreported will now require additional data collection, verification, review, and filing.
Workflow redesign. Title companies, settlement agents, attorneys, and escrow offices will need to integrate new data collection steps earlier in the transaction process.
Training and staffing. Staff must be educated to identify whether a deal is reportable and to collect proper documentation.
Liability risks. Failing to file a required report could expose the reporting person to penalties. Some commentators warn that intentional violations of the Bank Secrecy Act could carry prison terms.
Legal uncertainty. There are active efforts to challenge or nullify the rule by legislation and litigation (e.g. Senate and House resolutions, lawsuits).
Interaction with existing beneficial ownership rules. The real estate rule overlaps somewhat with the Corporate Transparency Act / BOI (Beneficial Ownership Information) rules, but has distinct requirements and scope.
Form not yet published. As of now, FinCEN hasn’t released the final “Real Estate Report” form; that is expected closer to the effective date (with public comment as required).
Because of these challenges, many in the industry are calling this rule a major operational and compliance frontier.
Practical Steps to Prepare
Here’s a high-level checklist you and your organization can use to get ready:
Educate leadership and staff. Hold briefings to ensure your team is aware of the changes and the looming compliance obligations.
Conduct gap analyses. Review existing transaction workflows and closing checklists—identify where new data points or decisions must be inserted.
Update intake and client questionnaires. Begin incorporating questions about entity vs individual buyers, trust structures, funding sources, etc., in earlier stages.
Implement “dry runs” or pilot processes. Even before the reporting form is released, simulate the process internally using mock data to catch bottlenecks.
Choose or adapt software tools. Ensure your closing, title, and escrow platforms can handle new fields, document capture, validation, and integration with FinCEN’s eventual e-filing.
Establish documentation protocols. Define how and where certification statements (beneficial ownership, designation agreements) are stored and tracked.
Monitor legal and regulatory developments. Because nullification efforts are ongoing, stay alert for changes via Congress or court rulings.
Coordinate among parties. In each transaction, get clarity early on who will serve as reporting person (default cascade or by agreement).
Engage counsel and compliance experts. Especially for complex entity structures or high volume firms, external guidance can help avoid pitfalls.
Conclusion
FinCEN’s new residential real estate reporting rule represents one of the most substantial regulatory changes for the real estate industry in the last decade. By expanding the scope beyond localized all-cash transactions to a nationwide standard, it brings a new era of transparency—and complexity—to residential property transfers involving entities or trusts.
Those who begin preparing now (updating systems, training staff, refining workflows) will be best positioned to make the transition smoothly. The deadline is firm (December 1, 2025), but the path to compliance should begin well in advance.
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