Recent federal regulations now require certain real estate transactions to be reported to the Financial Crimes Enforcement Network, commonly referred to as FinCEN. These rules are intended to increase transparency in real estate transfers and help prevent illicit financial activity.

While many real estate transactions are not subject to FinCEN reporting, some are. Understanding when reporting applies can help avoid unnecessary delays at the closing table.

When Is FinCEN Reporting Required

Transactions that require FinCEN reporting generally meet all three of the following criteria.

• First, the property involved is residential real estate or property that can be used for one to four family residential purposes. This includes single family homes, condominiums, certain mixed use properties, and vacant land that is zoned or intended for residential development.
• Second, the transaction is non financed by a federally chartered bank, credit union, or traditional mortgage lender. This commonly includes cash purchases, private or investor financing, seller carryback arrangements, and other non traditional financing structures.
• Third, the buyer is an entity rather than an individual. This includes corporations, limited liability companies including single member LLCs, partnerships, and trusts.

When all three of these criteria are met, FinCEN reporting is generally required unless a specific exemption applies.

Additional information and specific examples related to each of these criteria are available in the FinCEN reporting flow chart below, which provides a step by step visual guide to help determine whether a transaction is subject to reporting or exempt under the federal rules.

FinCEN: When Reporting is Required

Timing Is Important

When FinCEN reporting is required, the necessary information must be submitted and approved at least seventy two hours prior to closing.

Delays in completing the required information may result in closing delays. For this reason, we strongly encourage all parties to complete any requested information as soon as it is received.

What to Expect If Reporting Applies

If your transaction requires FinCEN reporting, each applicable party will receive secure instructions to provide the required information. All required information must be completed and approved before the seventy two hour deadline. Once compliance is confirmed, the transaction may proceed as scheduled.

Our team will help coordinate the process and guide you through the timing to keep everything on track.

Data Security and Confidentiality

Information collected for FinCEN reporting is handled through secure and federally compliant systems designed to protect sensitive personal and financial information. These systems are used nationwide as part of standard compliance for transactions subject to reporting.

Questions We Are Here to Help

If you have questions about whether FinCEN reporting applies to your transaction or need help understanding the process, our team is happy to assist.

Phone: 701 241 9282
Email: info@thetitlecompany.com

We appreciate your cooperation as we work together to meet federal requirements and keep your transaction moving forward.

We look forward to seeing you at the closing table.