News you may use · Multifamily Strategy Community

News you may use

Starting March 1, 2026, real estate closings are changing in a way most investors are not paying attention to...yet.

FinCEN is implementing new reporting requirements, and if you buy or sell through an LLC, trust, or corporation, this will matter to you.

This falls under AML, which stands for anti money laundering.

If you have ever gotten a conventional, FHA, or VA loan, you have already experienced AML, whether you knew it or not. That is why lenders dig through your financial life, verify income, question deposits, and document where funds came from. Government backed loans already operate under those rules.

The gap has always been cash and private money transactions.

Hard money lenders. Commercial lenders that keep loans in-house. Private individuals lending funds. Historically, many of those transactions have not required the same federal reporting.

That is what this new rule is addressing.

Here is the trigger.

If the Buyer is an entity and the lender has not already completed AML compliance, the closing attorney will now be required to file a FinCEN report with the federal government.

That report includes detailed ownership information and financial data tied to the transaction. Tax identification numbers. Information about who controls the entity. Details about how the deal was funded.

This is not a quick add-on form. It is a significant reporting package, and law firms are required to submit it within 30 days of closing. Most firms I am hearing from expect to charge an additional fee to handle it.

And yes, this will apply to Subject To deals as well...even though in most cases, no new funding is needed.

Go figure...

Most title companies and closing attorneys are taking the position that Sub2 transactions fall squarely inside this rule when an entity is involved and no lender has already performed AML. Just because there is no new institutional loan does not mean it is exempt from reporting. If an LLC is buying and there has been no prior AML process for the transaction, they will require the FinCEN filing.

Do not assume your creative deal structure sidesteps this. In most cases, it will not.

If the Buyer is an individual purchasing in their own name, no FinCEN report is required.

If the Buyer is an entity and the Seller is an individual, the Buyer submits the report. The Seller does not.

If both Buyer and Seller are entities, both sides will be required to provide information.

So yes, this will influence how some deals are structured.

Do not be surprised if you see Buyers who normally purchase in LLCs start asking whether they should close in their personal name instead. That alone avoids triggering the reporting requirement.

There are limited exceptions. Certain estate planning transfers into a trust are not subject to reporting. But most arm's-length purchases involving entities will be.

It also means simple transfers that used to be easy, like quitclaim deeds involving LLCs, may now require far more paperwork and cost more.

The public explanation is that this is about stopping illicit activity. That is how it was sold. In practice, what it clearly does is expand the federal government’s visibility into entity ownership and the movement of funds tied to real estate transactions.

Whether you agree with that or not is beside the point.

What matters is understanding when it applies, how it gets triggered, and how it affects your closings.

If you operate through entities or you do Sub2 deals, you should be talking with your title company or closing attorney now. After March 1, 2026, the paperwork and the cost will not be optional.

Know the rules. Structure accordingly. Do not wait until you are at the closing table to figure it out.

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