The U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) recently announced a final rule related to certain all-cash transactions. The rule will take effect on December 1, 2025.

FinCEN is tasked with identification and prevention of financial crimes. Real estate purchases have long-since been identified as a potential arena for financial crimes, such as money laundering. This is especially true of all-cash transactions, which bypass federal lending reporting requirements, and of transactions involving a legal entity (such as an LLC) or a trust, which can help conceal a bad actor’s identity. Real estate transactions which are both all-cash and involve transfer of the property to a legal entity/trust are considered especially high risk.

As such, FinCEN has enacted additional reporting requirements for certain all-cash transactions. The reporting requirements will apply to transactions 1) involving residential real estate; 2) which are not financed; 3) in which the property is transferred to a legal entity or trust; and 4) when an exemption does not apply. When all the above requirements are met, the following information must be reported to FinCEN:

• The reporting person; 
• The legal entity (transferee entity) or trust (transferee trust) receiving ownership of the property;
• The beneficial owners of the transferee entity or transferee trust;
• Certain individuals signing documents on behalf of the transferee entity or transferee trust during the reportable transfer;
• The transferor (e.g., the seller);
• The residential real property being transferred; and
• Total consideration and certain information about any payments made.

There are several different professionals who are allowed to report this information, and only one report is required per transaction. Per FinCEN’s guidance, they expect “that the obligation to file reports will generally rest with settlement agents, title insurance agents, escrow agents, and attorneys.” The rule provides a reporting cascade, which is means of determining which real estate professional will handle the reporting. The rule also allows the real estate professionals to enter into a written agreement delegating the reporting responsibility to a particular real estate professional.

FinCEN has not yet announced what form the required report will take. AAR’s Legal Team will keep you updated as additional information becomes available.