The information required to be reported includes, but is not limited to the: ▷ NAME OF THE REPORTING PERSON. ▷ LEGAL ENTITY RECEIVING OWNERSHIP. ▷ BENEFICIAL OWNER OF THE TRUST OR LEGAL ENTITY. ▷ TRANSFEROR (SELLER). ▷ PROPERTY BEING TRANSFERRED. ▷ TOTAL CONSIDERATION PAID. “Non-financed” residential real property transfers made to a trust or legal entity must be reported, unless there is an exemption. Transfers to an individual do not require reporting. The purchase price and property value are of no consequence in this rule. However, “non-financed” transactions include any financing by a lender that is not required to maintain an Anti-Money Laundering Program (AML) and to file Suspicious Activity Reports (SARs). Therefore, most if not all purchases involving hard money loans and private lending to trusts or legal entities as purchasers would require reporting. The party responsible for reporting under the rule depends on the nature of the transaction. If a real estate agent represents a party to the transaction, they have the primary responsibility for doing the reporting. If there is no real estate agent involved, then the next responsible party would be the settlement agent (title
Bad actors invest in residential real estate to launder funds and hide their identities, which can lead to distorted housing prices as well as threats to the country’s economy and national security.”
GAYLENE ROGERS LONERGAN
company). There is a cascading list of responsible parties after that.
Does it apply to all locations within the U. S.?
Yes.
This rule is presently scheduled to go into effect on Dec. 1, 2025.
Gaylene Rogers Lonergan founded The Lonergan Law Firm, P.L.L.C., a real estate law and banking law practice and real estate closing office, headquartered in Dallas, Texas in 2000. She has been serving clients throughout Texas since then. Lonergan has more than 40 years’ experience dealing with virtually every aspect of commercial and residential real estate law, banking, and title transactions. Lonergan holds an MBA from Texas Tech University and graduated cum laude from the Texas Tech University School of Law. Lonergan Law Firm, PLLC, will represent
YOUR NEXT STEP As stated, this is a significant change to the real estate closing process. Both the government and the title industry are developing the procedures required to comply with this rule. When you intend to buy a residential real estate property through a legal entity or trust in a non- financed transaction on or after Dec. 1, 2025, contact a trusted law firm or title closing office to ensure you comply with FinCEN’s Residential Real Estate Rule.
you only after being retained and that agreement is made in writing.
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