FinCEN wants to control real estate transactions

The Biden administration wants to make residential real estate transactions more transparent as part of efforts to combat money laundering and the movement of dirty money through the American financial system.

The Financial Crimes Enforcement Network (FinCEN) has issued a rule that will require real estate professionals to report information to the agency on non-financed sales of residential real estate to legal entities, trusts, and shell companies. That is, if a transaction is made with a single payment, bypassing the bank’s due diligence conducted when providing a loan, the real estate agent will be required to report this transaction to FinCEN and provide full information about the buyer.

Purchasing residential real estate for cash is considered to be associated with a high risk of money laundering. The new rule will not require reporting on sales to individuals.

The effective date of the new rules has not yet been announced.

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