New Federal Reporting Rules for Real Estate: What Buyers and Sellers Should Know

Beginning March 1, 2026, a new federal rule will affect certain real estate transactions across the country. The Financial Crimes Enforcement Network (FinCEN) is requiring escrow and title companies to collect and report specific information in order to help prevent money laundering through real estate. If you’re planning to buy or sell property, here’s what this means for you.

When Does This Rule Apply?

Reporting will be required if all three of these conditions are met:

• The buyer is a legal entity or trust

• The purchase is all cash (or financed through certain non-traditional lenders)

• The property is residential real estate (1–4 units), including vacant land if construction is intended

What Information Will Be Collected?

Escrow will need to gather and report details such as:

• Names and dates of birth

• Addresses

• “Doing Business As” (DBA) names

• Citizenship

• Taxpayer Identification Numbers (TINs)

This applies to both buyers and sellers, and their entities. Importantly, escrow cannot close without this information.

How Contracts Will Change

To make compliance smoother, the California Association of Realtors (C.A.R.) is introducing a new form called FRR-PA. This addendum will be bundled into purchase contracts, making compliance not only a legal requirement but also a contractual obligation. Both Buyers and Sellers will need to sign. Without both signatures, there is not valid contract.

What Buyers and Sellers Should Do

• Be prepared early. Gather the required information before escrow begins.

• Work with your agent. Realtors will guide you through the new paperwork and ensure you’re ready.

• Expect transparency. These rules are designed to protect the integrity of the real estate market.

Although this might be another step in your real estate process, there is a reason it was implemented. The government wants to close loopholes that allowed criminals to launder money through real estate, especially in all‑cash purchases made by shell companies or trusts. By requiring escrow and title companies to report detailed buyer and seller information, FinCEN aims to increase transparency, protect the U.S. financial system, and prevent illicit activity.

Source: C.A.R.