FinCEN Requires AML Reports for Real Estate Transactions to Entities and Trusts

On August 29, 2024, the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Treasury issued a final rule requiring anti-money laundering (“AML”) reports for certain non-exempt real estate transfers to entities and trusts (“Transferees”) as of December 1, 2025. The reports will be required for Transferees of buildings of, or land where the Transferee intend to build, a unit for up to four families, or a share in a coop. Exemptions include, among others: (i) certain transfers involving a mortgage or other extension of credit; (ii) a transfer or revocation of an easement; and (iii) those that result from a death of the owner, divorce or bankruptcy. The reports are generally not available publicly but may be available to parties to the transfer. Litigation seems possible, but FinCEN indicates that the rule is based on a legislative mandate.