FinCEN Delays Effective Date on Residential Real Estate AML Rule

The Financial Crimes Enforcement Network ("FinCEN") issued an exemptive relief order postponing the effective date of its final rule establishing anti-money laundering ("AML") requirements for certain non-financed residential real estate transactions ("Residential Real Estate Rule").

Originally scheduled to take effect on December 1, 2025, the rule’s compliance date has been postponed to March 1, 2026. FinCEN stated that during this period, covered entities are not required to file reports for qualifying transactions.

Adopted under the Bank Secrecy Act, the rule requires real estate professionals involved in closing and settlement services—including title companies, escrow agents, and attorneys—to report non-financed transfers of residential property to legal entities and trusts. FinCEN stated that these reports are intended to help identify illicit finance risks in the residential real estate market, where cash transactions can obscure beneficial ownership and facilitate money laundering.

FinCEN explained that the temporary exemption provides industry participants with additional time to develop AML policies. FinCEN noted that the delay also aligns with the Administration’s broader efforts to reduce near-term compliance burdens, while ensuring that the real estate industry is prepared to effectively meet the rule’s objectives once it takes effect.