A significant new federal rule took effect March 1, 2026, and if you are buying or selling residential real estate through a legal entity or trust, it applies to you.
The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, has finalized its Anti-Money Laundering Regulations for Residential Real Estate Transfers — commonly called the Residential Real Estate Rule. The rule is part of a broader federal effort to combat money laundering and illicit finance in the U.S. real estate market.
What the Rule Requires
The rule requires certain professionals involved in residential real estate closings to file a Real Estate Report with FinCEN when a non-financed (all-cash) transfer of residential property occurs and the buyer is a legal entity or trust. These reports are similar in purpose to existing geographic targeting orders, but now apply nationally and on a permanent basis.
Covered professionals — called “reporting persons” under the rule — include settlement agents, title insurance agents, escrow agents, attorneys, and others who perform specific functions at closing. A cascading system determines who among them bears the reporting obligation for a given transaction.
What Property Is Covered
The rule covers residential real property, including single-family homes, townhouses, condominiums, cooperatives, and buildings designed for occupancy by one to four families. Mixed-use properties with a residential component are included. Certain undeveloped land is also covered if the buyer intends to build a one-to-four-family structure on it.
Key Points Buyers and Sellers Should Know
There is no minimum sale price threshold. Low-value transfers, and even gifts where no money changes hands, are reportable if the other criteria are met. The rule is triggered by the nature of the buyer — a legal entity or trust — not by the dollar amount of the transaction.
Reporting persons must collect identifying information about the transaction, the property, the transferee entity or trust, and the beneficial owners of that entity. This includes taxpayer identification numbers and, in some cases, passport numbers.
Why This Matters
If you are purchasing residential real estate through an LLC, corporation, partnership, or trust, expect your closing attorney or title company to ask for detailed ownership and identification information. Failing to provide accurate information can create compliance problems for the professionals involved — and potentially legal exposure for buyers who provide false or misleading details.
Questions?
If you have questions about how this rule affects a pending transaction or how to structure a real estate acquisition, contact Messick Law, PLLC. We counsel clients on real estate transactions, trust and estate matters, and related litigation throughout Minnesota.