What Realtors need to know about FinCEN's Residential Real Estate Reporting rule

What's my role?

While Settlement Agents are responsible for filing, Real Estate Agents play a critical

role in identifying reportable transactions and preparing clients for a smooth transaction.

You'll need to:

1) Ask early if the buyer is an LLC, corporation, or trust and immediately alert the

settlement agent if there are any changes.

2) Confirm whether financing involves a lender with an anti-money laundering (AML)

program.

3) Help Buyer and Seller clients timely gather or meet with appropriate professionals

to gather:

• Entity/trust details

• Beneficial ownership information (Buyer only)

• Payment sources and bank details (Buyer only)

What Transactions are Reportable?

A transaction must be reported if:

• The property is residential real estate (including condos, town-homes, co-ops, and vacant land intended for 1–4 family structures)

• The transfer is non-financed (e.g., all-cash) or where the lender does not

  have an anti-money laundering (AML) program

• The buyer is a legal entity or trust

• No exemption applies

Common Exceptions

No report is required for:

• Transfers due to death, divorce, or bankruptcy

• 1031 exchange company

• Specific, highly-regulated trusts and entities

The rule itself has many other exemptions. Your customer may need to consult with their attorney or other advisors to help assist with determining whether an exemption may be applicable.

Why It Matters

Failure to comply can result in civil and criminal penalties, including imprisonment. Agents must be proactive to avoid delays and protect clients.

Download this information as a PDF below:

FinCEN-Real-Estate-Agents.pdf

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