The U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has implemented a nationwide reporting rule that extends beyond traditional residential closings and may also apply to certain commercial development deals involving entity buyers, vacant land, or alternative financing structures. Developers—even those operating outside of the residential market—should be aware of the Rule and understand when a closing may trigger federal reporting obligations.

Key points to know:

• Buyer disclosure requirements: For closings that trigger reporting, buyers must disclose their sources of funds, identify beneficial owners and the individuals signing on their behalf, and provide personal information for each individual including residential address and social security number.  
• When reporting applies: Reporting is required when a transfer is non‑financed, involves residential real property, and the buyer is a legal entity or trust, unless an exception applies.
• “Residential” is defined broadly: Single‑family homes (including teardown properties), duplexes, townhome sites, condominium units, and vacant land intended for one‑to‑four‑unit development may all qualify.
• Financing structures matter: Seller financing, private loans, fund‑level credit, and land‑banking arrangements are treated as non‑financed and may trigger reporting obligations.

Read the full alert to understand how FinCEN’s new rule may affect your upcoming acquisitions and closing processes.