FinCEN’s New AML Rule March 1, 2026: What Title Agents Need to Know & Do Now
- Title Aid
- Sep 19
- 4 min read
Updated: Sep 30
09/30/2025 UPDATED: FinCEN announced two important updates: |
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As of December 1, 2025, a major new rule from the Financial Crimes Enforcement Network (FinCEN) will change how many real estate closings and settlements are handled — especially when non-financed residential property is being transferred to legal entities or trusts. For title agents, settlement agents, and closing attorneys, it’s crucial to understand what the rule requires, what counts as a reportable transaction, who must report, and how to adjust processes now.
Below is a breakdown of what the rule does, who it impacts, and steps that title agents should take to get ready.
What the New Rule Is & Why It Exists FinCEN AML Rule 2025
The rule is officially called Anti-Money Laundering Regulations for Residential Real Estate Transfers.
Its goal is to increase transparency in the U.S. residential real estate sector, especially to deter money laundering, fraud, and illicit finance. It builds off earlier geographic targeting orders (GTOs) that required similar reporting in select high-value or high-risk locations.
Previously, GTOs applied only in certain large metro areas or counties and often only above certain dollar thresholds. The new rule expands reporting obligations nationwide, with no minimum dollar value requirement in most cases.
Key Definitions
Term | What It Means / Why It Matters |
Residential Real Property (RRE) | Includes one- to four-family homes, townhouses, condos, co-ops; also vacant land if the transferee intends to build a one- to-four family residential structure; units in mixed-use buildings if they are designed for occupancy by one to four families. |
Non-Financed Transfer | A transfer that does not involve an extension of credit secured by the property where the lender is a financial institution subject to AML/SAR obligations. This includes “all-cash” sales, private financing without AML obligations, or seller financing where the lender doesn’t meet AML program requirements. |
Transferee Entity | Legal entities other than trusts or individuals (LLCs, corporations, partnerships, estates, etc.), with some exemptions for highly-regulated entities. |
Transferee Trust | Trusts or similar legal arrangements (including some foreign ones), with certain excepted trusts. Beneficial ownership of trusts must be reported under the rule in some cases. |
What Transfers Must Be Reported
A transfer is reportable if all of the following are true:
It is a transfer of an ownership interest in residential real property in the U.S. to a transferee entity or transferee trust.
The transfer is non-financed, in the sense described above.
It is not one of the exempted types of transfers. Exemptions include:
Transfers to an individual (not an entity or trust)
Transfers resulting from death, divorce, or by operation of law (estate, intestacy)
Transfers supervised by a U.S. court, bankruptcy estate transfers, etc.
Certain transfers to or from exempt entities or trusts (e.g. highly regulated ones)
Who Must File the Report (“Reporting Persons”)
The rule defines a cascade to decide who is the responsible “reporting person” for any given transaction. Usually this will be:
The closing or settlement agent on the settlement statement. If that person is unavailable or not clearly identified, then
The person who prepares the settlement statement, or
The person who files the deed or other instrument for recordation, or
The person underwriting the title insurance, or
The person disbursing the greatest amount of funds.
The rule also allows for parties in the cascade to enter into a written designation agreement in which one person agrees to assume the reporting obligations for that transaction.
What Information Must Be Collected & Reported
For reportable transfers, the reporting person must collect and report:
Identity of the reporting person (who is filing).
Information about the property: address, type of property, whether improvements, vacant land, etc.
Identity of the transferor (seller) and transferee (entity or trust), including beneficial owners of the transferee entity/trust. (Name, date of birth, residential address, taxpayer identification number, citizenship, ownership percentages or control interest).
Details of the transfer: date, consideration paid, how it was paid, source of funds.
Written certifications from transferees or trust representatives about beneficial ownership info, which must be retained.
A “reasonable reliance standard” applies — the reporting person can rely on information provided by others (e.g., the transferee), as long as there aren’t known facts that reasonably call the information into question.
Timing & Recordkeeping Requirements
Effective date: December 1, 2025.
Filing deadline: Reports must be filed either by (a) the last day of the month after the month in which the reportable transfer happened, or (b) 30 calendar days after the date of closing — whichever is later.
Recordkeeping: Reporting persons must keep for five years:
Written certifications from transferees or their representatives.
Copies of designation agreements, if applicable.
Penalties for Non-Compliance
Negligent violations: Civil penalties, including fines per violation, with increased penalties for patterns of non-compliance.
Willful violations: Potential criminal penalties including fines up to $250,000, imprisonment up to 5 years, and additional civil penalties.
What Title Agents Should Do Now to Prepare
Review & map your workflows Identify every type of residential transfer you handle. Ask: is this non-financed? Is the buyer an entity/trust? Who in the cascade would be responsible?
Train staff and partners Ensure employees and outside partners understand the new requirements, definitions, and certifications needed.
Update intake & closing documents Add fields for beneficial ownership information and include written certifications from transferees. Have designation agreements ready when needed.
Implement verification processes Verify names, addresses, TINs, and ownership/control interests. Know when you can rely on provided information and when to question it.
Update systems/software & recordkeeping Confirm your software can capture new required data fields, file reports within deadlines, and store certifications for five years.
Monitor updates Watch for the official reporting form (“Real Estate Report” or RER) and further FinCEN guidance before December 1, 2025.
FinCEN’s new AML rule is a major shift: non-financed transfers to entities or trusts will now trigger reporting obligations nationwide, with no minimum dollar threshold. Title agents who prepare early — updating processes, training staff, and ensuring compliance systems are in fincen-aml-rule-2025-title-agentsplace — will be better positioned to avoid penalties and provide smooth service to clients.
Disclaimer:
This checklist and article are provided for informational and educational purposes only and do not constitute legal advice. Title agents should always consult with their underwriter and legal counsel to ensure compliance with applicable laws, regulations, and company policies.
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