Key Biscayne Stories

Welcome to Key Biscayne Stories podcast, real estate edition. I'm starting a real estate edition because real estate is something that I've been passionate about for a very long time. I am your host, Alejandro Servali, your neighbor realtor with eRealty International here in The Quay. Today, I want to talk about the important federal change that will impact certain real estate transactions starting March 1. The new FinCEN reporting rule.

FinCEN stands for Financial Crimes Enforcement Network. It may sound technical, but if you buy, sell, invest or hold property through an LLC or trust, this is something you'll want to understand. So what is the FinCEN rule? FinCEN, again, stands for the Financial Crimes Enforcement Network, a bureau of the US Department of Treasury. Beginning 03/01/2026, a new rule called the Anti Money Laundering Regulations for Residential Real Estate Transfers will take effect nationwide.

Its purpose is to increase transparency in residential real estate transactions and help federal authorities identify potential money laundering activities. What transactions are covered? The rule generally applies to all cash residential property transfers, where the buyer is a legal entity or trust, the purchase is non financed. So, if an LLC, corporation, partnership, or trust purchases residential property without a mortgage, a federal report may now be required. Who has to file?

The reporting obligation typically falls on professionals involved in closing the process, such as title companies, settlement agents, and closing agents. They may be required to file a real estate report with FinCEN identifying certain details about the transaction and the beneficial owners behind the entity. For many professionals in real estate, this represents a significant compliance shift as they were not previously subject to federal anti money laundering reporting requirements. Why is this happening? The federal authorities have long identified high value all cash real estate purchases through legal entities as a potential avenue for money laundering.

This rule is intended to increase ownership transparency, identify beneficial owners behind the LLC and trusts, and deter illicit financial activity. It essentially brings part of the residential real estate market into a broader anti money laundering regulatory transfer. For most traditional buyers, especially those purchasing in their personal name or financing, this rule will not apply. However, if you purchase through an LLC, again, by using a trust, make an all cash offer. You may see additional documentation requirements or procedural steps before closing.

In markets like Miami and Key Biscayne, where entity purchases and cash transactions are common, this rule is especially relevant. What should you do? If you're considering buying property through an entity or trust, especially in cash, start early conversations with your real estate attorney, your CPA, and your title company. Preparation will make the process smoother. Well, I hope this information helps.

Before we wrap up, please remember that every real estate transaction is unique and laws and regulations, including federal rules like FinCEN, reporting requirements can change. Always consult with a qualified real estate attorney, CPA, tax professional, compliance specialist, or licensed real estate professional regarding your specific situation before making any decision. Thank you for joining me today. If you want to contact me, you can call me at (305) 431-3526. The best thing you can do is shoot me a text or you could also email me at AlejandroCervalim@gmail.com.

I'm gonna leave my contact information in the show notes.