Do foreign buyers have to file FinCEN reports?
Foreign citizenship or residence alone does not trigger reporting. The same three-part test applies: residential property + entity/trust buyer + all-cash/non-traditional financing. A foreign individual using bank financing would not trigger reporting, while a domestic LLC using cash would.
What if the buyer structure includes multiple entities?
If the purchasing entity is owned by other entities, the beneficial ownership analysis continues up the ownership chain until reaching the natural persons who ultimately own or control 25% or more. This can create complex disclosure requirements.
Can a transaction close before the Real Estate Report is filed?
Yes. The report must be filed within 30 days AFTER closing. However, all information must be gathered BEFORE closing to avoid delays.
What if the buyer refuses to provide beneficial ownership information?
The title company or closing attorney may refuse to close the transaction if required information is not provided. Buyers should understand this is a federal legal requirement, not a lender or title company policy.
Are there any exemptions to the reporting requirement?
Very few. The rule provides limited exemptions for certain government entities and specific transaction types. Most private party transactions meeting the three-part test will be reportable.
Exemptions are provided for certain common, lower-risk transfers. A reportable transfer does not include:
• a transfer of an easement;
• a transfer resulting from the death of an individual, whether pursuant to the terms of a decedent’s will or the terms of a trust, the operation of law, or by contractual provision;
• a transfer incident to divorce or dissolution of a marriage or civil union;
• a transfer to a bankruptcy estate;
• a transfer supervised by a court in the United States;
• a transfer made for no consideration by an individual, either alone or with their spouse, to a trust of which that individual, their spouse, or both of them, are the settlor or grantor;
• a transfer to a qualified intermediary for purposes of a like-kind exchange under Section 1031 of the Internal Revenue Code; and
• a transfer for which there is no reporting person.
Does this rule replace the Corporate Transparency Act BOI reporting?
No. The FinCEN Real Estate Reporting Rule and the Corporate Transparency Act Beneficial Ownership Information (BOI) reporting are separate requirements. Some entities may need to comply with both.
What happens if the 30-day filing deadline is missed?
Late filing can result in penalties. The reporting party should file the report as soon as possible and may need to explain the delay to FinCEN.
Can buyers use a nominee or agent to avoid disclosure?
No. The rule requires disclosure of the ultimate beneficial owners who own or control the entity, regardless of nominee arrangements or agent structures.
