At Oakwood Escrow, our responsibility has always been to protect our clients, safeguard transactions, and stay ahead of regulatory changes that impact the real estate community. Beginning March 1, 2026, new federal reporting requirements issued by the Financial Crimes Enforcement Network (FinCEN) will apply to certain residential real estate purchases – where the Buyer is paying cash or obtaining financing through a non AML reporting lender – particularly when property is acquired through an LLC, corporation, partnership, or similar legal entity.
This update is being shared early so you can plan ahead, avoid surprises during escrow, and ensure your transactions close smoothly.
What Is Changing
FinCEN has introduced a nationwide reporting rule focused on non-financed residential real estate purchases involving legal entities. The purpose of this regulation is to increase transparency in real estate transactions and help prevent financial crimes involving anonymous ownership structures.
Under this new rule, settlement agents such as Oakwood Escrow may be required to collect additional information and file a federal report when a qualifying transaction occurs.
Who May Be Affected
These requirements generally apply when:
- Residential property is purchased without traditional lender financing
- The buyer is an LLC, corporation, partnership, trust, or other legal entity
- The transaction involves one-to-four unit residential property, condominiums, or similar residential real estate, as well as vacant land when the Buyer plans to build a structure.
Buyers purchasing in their individual names with institutional financing are typically not impacted by this specific reporting rule.
What Will be Needed Prior to Closing
To remain compliant and avoid delays, escrow will need certain documentation and information from entity buyers and sellers regardless of whether or not they are an entity or individual well before closing. This may include:
- Legal entity formation information
- Identification of beneficial owners – the individuals who ultimately own or control the entity
- Government-issued identification and contact details for those individuals
- Confirmation of how funds are being delivered for the purchase, including bank account information for the depositors
- Additional certifications or disclosures required by federal reporting guidelines
Our team will communicate directly with agents and buyers if a transaction meets reporting criteria. Early cooperation will be essential to keeping timelines intact.
Why This Matters
Failure to provide accurate information will result in:
- Delays or inability to close escrow on schedule
- Required reporting corrections after closing
- Significant federal penalties for false, incomplete, or misleading disclosures
Federal reporting violations can include civil and criminal consequences. For this reason, Oakwood Escrow will be implementing strict compliance procedures to ensure every transaction meets the new standards.
Our Commitment to You
While this regulation introduces new steps, our goal is to make the process clear, efficient, and predictable. Oakwood Escrow is investing in training, technology, and compliance systems so that our agent partners and clients continue to experience a smooth and professional closing process.
We encourage agents to begin discussing entity ownership structures and funding sources with their buyers early in the transaction. Planning ahead will help prevent last-minute complications and keep everyone aligned with federal requirements.
If you have questions about how these new reporting rules may affect an upcoming transaction, please reach out to your Oakwood Escrow officer or our compliance team at any time. We are here to guide you through the changes and ensure every closing remains secure and successful.