« FBI Reports Cybercrime Losses Hit $12.5B, Record Number of Complaints Filed in 2023 | Main | Fresh Phish: Fake SharePoint Fax »


Breaking Down the FinCEN Anti-Money Laundering Rule: What Is Considered Residential Property?

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking that would require certain people involved in real estate closings and settlements to report information to the agency about all-cash residential transactions nationwide involving legal entities and trusts. You can read a summary of the proposed rule's requirements here.

ALTA analyzes various parts of the proposal to help title and settlement professionals understand the impact it will have on their operation.

Here’s a look at what FinCEN considers residential property. Since FinCEN’s proposed real estate rule only requires reporting for residential transactions and not commercial, it’s important to understand the distinction which may be different than the way you think about it in your business landscape.

For the sake of this rule, FinCEN defines “residential property” in three ways: 

  1. real property designed for one- to four-family occupancy
  2. vacant or unimproved land zoned (or permitted) for construction for 1-4 family occupancy
  3. shares in a cooperative housing corporation

To determine if one of these three factors apply to a property, consider the following questions:

  • Can I infer that a property is residential from its purchase contract?
  • If the property is vacant land, is it zoned as residential or commercial?
    • Hint: This can be obtained from the county or city’s zoning office
  • Does the property’s tax assessor data indicate a “building type?”
  • Does the building appear to be designed for a family of four or less?

It's important to note, however, that just because a property meets one of these above indicators, does not necessarily mean it needs to be reported to FinCEN. If the property meets one of these indicators AND is purchased via an all-cash transaction, then it must be reported to FinCEN.

Additional Articles


Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment