Understanding how this rule works can help avoid surprises during a deed transfer or closing.
What Is the FinCEN Residential Real Estate Reporting Rule?
FinCEN’s Residential Real Estate Reporting Rule requires a confidential Real Estate Report to be filed for certain non-financed transfers of residential property when the property is transferred to a legal entity or trust rather than to an individual.
The rule is intended to increase transparency in real estate transactions where no traditional bank financing is involved. FinCEN purpose and scope: https://www.fincen.gov/rre
What Property Is Covered?
Residential real estate includes single-family homes, condominiums, townhomes, cooperative units, duplexes, triplexes, four-plexes, and certain vacant land intended for residential construction. Commercial property transfers are not covered.
When Is a Transfer Reportable?
A transfer is generally reportable when the property is residential real estate, the transferee is an LLC, corporation, partnership, or trust, the transfer is non-financed, and no specific exemption applies.
Non-financed does not simply mean there is no mortgage. Cash purchases, seller financing, private loans, family loans, and hard-money lending are treated as non-financed.
Who Files the Report?
Property owners do not file the Real Estate Report themselves. FinCEN assigns the obligation to the reporting person, typically the title company, settlement agent, or attorney preparing or recording the deed.
Is the Report Public?
No. Real Estate Reports are not public records, are not subject to FOIA, and are accessible only to authorized government and law enforcement agencies.
How Davis Miles Can Help
While Davis Miles is not always the party responsible for filing a Real Estate Report, we assist clients in understanding how the rule applies, coordinating with title companies, and planning ownership structures with compliance in mind.