New Real Estate Law March 2026!

​By Attorney Kelly Jesson

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has adopted a new residential real estate reporting requirement, effective March 1, 2026, targeting non-financed transfers of residential property. Purchases involving bank financing already fall under anti-money laundering regulations, but if a bank is not involved, there’s very little oversight at all.  The new law is designed to prevent the use of entities and trusts to conceal illicit funds.

The reporting requirement applies when residential real property is transferred to a legal entity, such as an LLC, corporation, or trust and no bank or other institutional financing is involved.  The rule applies regardless of purchase price and captures transfers made without payment.

Luckily, certain transfers are excluded. An individual transferring property into their own revocable or irrevocable grantor trust does not require reporting. Transfers resulting from death (like transfer from a life estate) or inheritance (like transfer from probating a will) also do not trigger reporting.

Unfortunately, transfers from individuals to their own LLCs for asset protection purposes DOES trigger the rule.  So what might this mean for you?  FinCEN requires the disclosure of the names, dates of birth, addresses, citizenship, and taxpayer identification numbers of the transferee and the “beneficial owners” behind an entity. To be a beneficial owner, an individual must directly or indirectly exercise “substantial control” over the entity or own or control at least 25 percent of the entity’s ownership interests. This definition is the same as the definition of a beneficial owner in FinCEN’s Beneficial Ownership Information Reporting (BOIR) Rule that was repealed last year.

Reports must be filed through FinCEN’s Bank Secrecy Act e-filing system by the later of the last day of the month following the transfer or 30 calendar days after the transfer. It only applies to transfers occurring after March 1, 2026, so there’s no retroactivity, unlike the prior BOIR rule that was repealed.

Like the old BOIR rule, FinCEN assigns responsibility to the “reporting person;” generally the professional most directly responsible for the closing or recording of the deed. This means that we will be asking our clients engaging in such transactions to certify their information.  Costs for closings and recordings is likely to go up.

Don’t overlook this rule or try to do it yourself: the penalty for failing to file the required report could be as high as $1,394 for each violation, and an additional civil money penalty of up to $108,489 for a pattern of negligent activity.  Willful violations of the final rule could result in a term of imprisonment of not more than five years or a criminal fine of not more than $250,000, or both.

Please contact Jesson & Rains for more information!  We will continue to draft deeds for our clients for asset protection purposes and comply with the federal regulations.