Maryland Legal Alert for Financial Services
FinCEN’s New Residential Real Estate Reporting Rule: Implications for Financial Institutions and Real Estate Professionals
Effective March 1, 2026, the Financial Crimes Enforcement Network (“FinCEN”) implemented a new rule requiring certain professionals involved in real estate closings to report information about certain non-financed residential real estate transfers.
What transactions are covered?
A “reportable transfer” is a non-financed transfer of an ownership interest in residential real property to a legal entity or trust. Residential real property generally includes property in the United States designed for one-to-four family occupancy, land intended for such development, residential units within larger structures, and cooperative housing shares.
What transactions are excluded?
Excluded transfers include easements, transfers resulting from death, transfers incident to divorce, court-supervised transfers, certain no-consideration transfers to revocable trusts created by the transferor, and transfers to qualified intermediaries.
Who must report?
This rule places the responsibility on professionals involved in the closing process, such as settlement agents and title professionals, and in some cases attorneys. The rule establishes a reporting cascade to determine responsibility if the parties do not designate a reporting party in writing.
What must be reported?
A Real Estate Report filed with FinCEN must include information regarding:
- The reporting person, including name, role in the transaction, and address;
- The transferee entity or trust, including name, address, and identifying number;
- The beneficial owners of the transferee entity or trust, including name, date of birth, address, citizenship, and identifying number;
- The transferor, including identifying information similar to that provided for the transferee
When must the report be filed?
Reports must be filed by the last day of the month following the month in which the date of closing occurred or 30 calendar days after the date of closing, whichever is later.
Are there penalties for failing to report?
Yes. While the rule itself does not specify penalties, enforcement arises under the Bank Secrecy Act, which authorizes substantial civil and criminal penalties for violations.
For more information concerning this topic, please contact Tamia J. Morris.
Tamia J. Morris
410-576-4021 • tmorris@gfrlaw.com