Beginning March 1, 2026, certain residential real estate transactions must be reported to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) under the Residential Real Estate Reporting Rule (“RRE”). The RRE applies nationwide and focuses on specific non-financed transactions involving entities and trusts. While the RRE does not create new reporting requirements for real estate licensees, consumers will likely have questions about the new requirements. This article is intended to help educate licensees and give them information they can pass along to consumers.

This article is for information only and does not constitute legal advice. If you need legal advice, please seek guidance from retained counsel.

Covered Transactions

To fall under the RRE, a transaction must meet three basic conditions: (1) it must be non-financed, (2) it must involve residential property, and (3) it must be made with a buyer that is an entity or trust.

1. The transfer must be non-financed, meaning the purchase does not involve traditional financing from a lender. This includes cash sales, seller financing, and other transactions which do not rely on traditional lender financing.
2. The property involved must be residential. Under the RRE, residential property includes one-to-four family homes, units in condominiums or cooperatives, and certain vacant land intended for residential use. Commercial properties are not included.
3. Finally, the buyer must be a legal entity or a trust. Transfers to individuals are excluded.

Even when these conditions are met, many common situations are still exempt, including transfers related to death, divorce, estate planning, bankruptcy proceedings, court-supervised transfers, certain trust transfers without consideration, and exchanges to qualified intermediaries under 26 C.F.R. § 1031(k)-1. Whether a transaction is reportable depends on the specific facts. Any questions about whether the transaction information must be reported should be referred to the closing attorney. 

Information That Must Be Reported

When a transaction is reportable, the reporting person must submit information that identifies the transaction and the parties involved. This includes information about the reporting person, the property, the seller, and the buyer. For the buyer entity/trust, this includes information about individuals representing the buyer and those who ultimately own or control the entity or trust. For entities, this generally means individuals who exercise control or own at least twenty-five percent of the entity. For trusts, this may include trustees, certain beneficiaries, grantors or settlors with revocation rights, and others with authority over trust assets. The reporting person must also report the total purchase price and certain payment details.

Person Responsible for Reporting

Only one party is responsible for filing a report for each reportable transaction. This is usually the closing agent, title company, or escrow agent. If the parties do not designate a reporting person in writing, FinCEN assigns responsibility based on a reporting cascade, which prioritizes the settlement-related roles performed in the transaction. The full list of roles in the reporting cascade can be found here at C.2.

Consequences + What This Means for Licensees

The RRE does not impose new duties on real estate licensees to file reports or collect reporting information. Reporting obligations apply only to the designated reporting person. For the reporting person, failing to file the required report or submitting inaccurate information may result in civil or criminal penalties under federal law.

For licensees, the practical impact is mainly procedural. Consumers may be asked for additional information at closing, which can affect timing or require extra coordination with the title company or closing attorney. Some settlement providers may also charge fees related to preparing and filing the report. Being aware of the RRE will help licensees set expectations and respond to client questions as the March 1, 2026, effective date approaches.

Additional Resources:

• First American’s FinCEN RRE Guide
• FinCEN RRE FAQ