FinCEN AML Rule & Real Estate Reporting for Closings

Effective March 1, 2026, federal real estate reporting requirements issued by the Financial Crimes Enforcement Network (FinCEN) apply to certain residential real estate transactions in the United States.

These requirements are intended to increase transparency in real estate transfers involving legal entities and trusts, particularly when transactions are not financed through traditional institutional lenders.

This page provides an overview of when a real estate transaction may be reportable, what transactions are covered, who is responsible for reporting, and how the rule may impact the closing process.

When a Transaction Is Reportable

A real estate transfer is generally reportable under FinCEN AML rules only when all of the following conditions are met:

• The property is residential real property
• The buyer (transferee) is a legal entity or trust
• The transfer is non-financed
• No specific exemption applies

If any one of these conditions is not met, the transaction is typically not reportable.

Reference Documents

Download this FinCEN AML Reporting Flowchart (PDF) 

Download the FinCEN AML Real Estate Reporting Flowchart (PDF)

Residential Real Property

For purposes of FinCEN reporting, residential real property generally includes one-to-four family residential properties, condominiums and cooperative units, and vacant land intended for future one-to-four family residential development.

In some cases, property that appears commercial may still qualify as residential based on intended use.

Legal Entities and Trusts

The reporting rule applies when the buyer is not an individual.

Covered buyers may include limited liability companies (LLCs), corporations, partnerships, and certain trusts.

Individual buyers purchasing property in their own name are generally not subject to this rule.

Non-Financed Transfers

Non-financed does not mean “cash only.”

A transfer is considered non-financed when it is not funded by a financial institution subject to federal anti-money laundering and Suspicious Activity Report requirements.

Examples of non-financed transactions include all-cash purchases, seller-financed transactions, private or hard-money loans, and financing from individuals or non-regulated entities.

A transaction may involve financing and still be considered non-financed under this rule.

Common Exemptions

Certain real estate transfers are exempt from FinCEN AML reporting requirements. Common exemptions may include transfers resulting from death or estate administration, divorce or marital dissolution, bankruptcy proceedings, court-ordered or court-supervised transfers, certain estate-planning trust transfers, and transfers to a qualified intermediary in a 1031 exchange.

Each exemption has specific requirements and should be evaluated individually.

Reporting Responsibility

Only one party is responsible for filing a FinCEN real estate report. Reporting responsibility is determined using a federally defined reporting cascade.

The obligation falls to the highest applicable party in the following order:

1. Settlement or closing agent listed on the settlement statement

2. Party that prepares the settlement statement

3. Party that submits documents for recording

4. Party that underwrites the owner’s title insurance policy

5. Party that disburses the greatest amount of funds

6. Party that evaluates title status

7. Party that prepares the deed or transfer instrument

Information Included in a Report

A FinCEN real estate report may include property and transaction details, purchase price or consideration, payment and funding source information, buyer entity or trust information, beneficial ownership or control details where applicable, and authorized signer information.

Reports are filed directly with FinCEN and are not recorded with the county.

Reporting Deadlines and Record Retention

Reports are generally due by the later of 30 calendar days after closing or the last day of the month following the month of closing.

Reporting parties are expected to retain supporting documentation in accordance with federal requirements.

Delegation of Reporting Responsibility

In certain situations, reporting responsibility may be delegated through a written, transaction-specific designation agreement between eligible parties in the reporting cascade.

Without proper designation, compliance responsibility may remain with the reporting party.

Penalties for Non-Compliance

Failure to comply with FinCEN AML reporting requirements may result in civil penalties and, in cases of willful non-compliance, criminal penalties.

Role of Aristocrat Title

Aristocrat Title does not provide legal or tax advice and does not file FinCEN reports on behalf of clients.

Our role is to help identify transactions that may involve reporting considerations, communicate requirements early in the process, and coordinate with attorneys, CPAs, lenders, and real estate professionals to help ensure an organized and timely closing.

Closing

FinCEN AML and BOI compliance does not need to delay a real estate transaction, but it does require awareness and early communication.

If a transaction involves an LLC, trust, or non-traditional financing, early disclosure helps ensure a smoother closing process.

Aristocrat Title provides trusted, locally owned closing services throughout Southern Indiana and Greater Louisville. To schedule a closing, call 812.282.8704.