FinCEN's New AML Rule: What Florida Buyers Using LLCs Need to Know

When Marcus and Elena Rodriguez decided to purchase their $485,000 vacation property in Naples through their family LLC last month, they expected a straightforward closing. What they didn't expect was their title company requesting detailed ownership documentation for every member of their LLC, copies of their operating agreement, and personal information for individuals they'd never even thought about disclosing. "We've bought properties through our LLC before," Marcus told us. "This was completely different. Nobody warned us about these new federal requirements."

The Rodriguez family isn't alone. Across Florida, buyers who use LLCs, corporations, partnerships, or trusts for real estate purchases are discovering that the rules have fundamentally changed. Starting March 1, 2026, a sweeping new federal regulation requires title companies and closing agents to collect and report detailed information about the people behind these entities for certain non-financed transactions.

At Title Warehouses of America, we've been preparing for this transition through our partnership with Stewart Title. We want every buyer, seller, and real estate professional in Florida to understand what's coming and how to navigate it smoothly.

What Is the FinCEN Real Estate Rule?

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, finalized a rule in 2024 that dramatically expands reporting requirements for residential real estate transactions. The regulation, officially known as the Anti-Money Laundering Regulations for Residential Real Estate Transfers, takes effect March 1, 2026.

Here's the core requirement: when someone purchases residential real estate through a legal entity (like an LLC or corporation) or a trust, and the purchase is non-financed (meaning all-cash or financed by a lender without standard anti-money laundering programs), the closing professional must file a detailed report with the federal government.

Why does this matter for Florida? The Sunshine State has long been a focal point for real estate transparency efforts. Miami-Dade County was one of the first two areas targeted when FinCEN began its Geographic Targeting Orders (GTOs) back in January 2016. Those early orders required title companies to report all-cash purchases over $1 million by legal entities in specific high-risk areas.

Now, the new rule expands this nationwide, covering every county in Florida and across the United States, with no minimum purchase price threshold.

Why Florida Faces Greater Impact Than Most States

Florida's real estate market has several characteristics that make this rule particularly significant:

High Volume of All-Cash Transactions

Florida consistently ranks among the top states for all-cash real estate purchases. According to industry data, approximately 30-35% of Florida residential transactions involve buyers paying cash rather than obtaining traditional mortgages. This percentage climbs even higher in markets like Miami, Naples, and Palm Beach.

International Buyer Activity

Florida attracts substantial international investment in residential real estate. Many foreign buyers prefer using legal entities for asset protection, privacy, and tax planning reasons, all legitimate purposes. However, this same structure has historically made it difficult to identify the actual individuals behind property purchases.

Entity-Based Ownership is Common

From real estate investors owning rental portfolios to families using trusts for estate planning, entity-based property ownership is deeply embedded in Florida's real estate culture. This means a significant portion of transactions will now trigger reporting requirements.

What Triggers a Reportable Transaction?

Not every real estate purchase requires a FinCEN report. A transaction must meet all four criteria to be reportable:

1. Residential Real Property

The rule covers a broader range of properties than many buyers expect:

• Single-family homes, townhouses, and condominiums
• Cooperative units (shares or membership interests)
• Buildings designed for occupancy by 1-4 families
• Vacant land where the buyer intends to build a 1-4 family residence
• Mixed-use properties that include residential units

This means a small apartment building with four units, or a mixed-use property with retail on the ground floor and apartments above, could trigger reporting requirements if purchased by an entity without traditional financing.

2. Non-Financed Transfer

The purchase must not involve a loan from a financial institution that has its own anti-money laundering program and Suspicious Activity Report (SAR) filing obligations.

Transfers that ARE reportable include:

• All-cash purchases by entities or trusts
• Purchases financed by the seller
• Purchases financed by private lenders (hard money loans, family loans)
• Purchases financed by foreign banks without U.S. AML obligations
• Any purchase where the lender isn't subject to Bank Secrecy Act requirements

Transfers that are NOT reportable include:

• Traditional mortgage financing from a U.S. bank, credit union, or regulated mortgage lender (these lenders already have their own AML reporting requirements)
• Purchases by individuals in their own names (not through entities or trusts)

3. Legal Entity or Trust as Buyer

The buyer (transferee) must be:

• A corporation
• A limited liability company (LLC)
• A partnership
• A trust
• Any similar legal entity

Key point: If an individual purchases property in their own name (not through an entity or trust), the transaction is not reportable, even if it's all-cash.

4. No Exemption Applies

Certain transfers are exempt from reporting (see the full exemptions list below).

Who Must Report: The Cascade System

The new rule establishes a specific hierarchy, called a "cascade", for determining which professional has the responsibility to file the Real Estate Report with FinCEN.

The reporting cascade works like this:

1. Settlement or closing agent listed on the closing statement
2. Person who prepares the closing or settlement statement
3. Person who files the deed with the recording office
4. Title insurance underwriter
5. Person disbursing the greatest amount of funds in connection with the transfer
6. Person providing title search or examination services
7. Person who prepares the deed or other legal instrument transferring ownership

The first person in this cascade who's involved in the transaction becomes the "reporting person" responsible for filing with FinCEN.

In practice, FinCEN expects that title companies, settlement agents, and closing attorneys will handle the vast majority of these filings. For most Florida residential transactions, this means your title company will be the reporting person.

What This Means for You as a Buyer

The title company handling your closing will need to collect certain information from you before the transaction can close. If you're purchasing through an LLC or trust with cash (or non-institutional financing), expect to provide documentation you haven't needed in previous purchases.

Designation Agreements

The rule allows for designation agreements where one real estate professional can designate another to serve as the reporting person. This must be done in writing for each transaction and include specific information about the transfer and both parties. These agreements provide flexibility in complex transactions, but the default cascade typically means your title company handles the filing.

What Information Gets Reported?

If your purchase triggers a reportable transfer, here's what FinCEN will receive:

About the Property

• Property address and legal description
• Type of residential property
• Purchase price and closing date

About the Reporting Person

• Name, address, and contact information of the title company or professional filing the report
• Taxpayer identification number

About the Purchasing Entity or Trust

• Legal name and jurisdiction of formation
• Principal place of business
• Taxpayer identification number (if available)

About the Beneficial Owners

This is where the new requirements become most significant. For each beneficial owner identified, the report requires:

• Full legal name
• Date of birth
• Current residential address (not a business address)
• Citizenship or nationality
• Taxpayer identification number (SSN or ITIN)

About the Seller

• Name and address of the transferor(s)
• Taxpayer identification number (if available)

About the Transaction

• Total consideration (purchase price)
• Payment methods and amounts from the purchaser

Who Are the "Beneficial Owners"?

Understanding who qualifies as a beneficial owner is critical for compliance.

For Legal Entities (LLCs, Corporations, Partnerships)

Beneficial owners are individuals who either:

• Exercise substantial control over the entity, OR
• Own or control at least 25% of the ownership interests

This definition mirrors FinCEN's Beneficial Ownership Information Reporting Rule, so if your entity has already filed a BOI report, the same individuals will likely need to be disclosed.

For Trusts

The definition is broader. Beneficial owners of a trust include:

• Trustees
• Individuals with authority to dispose of trust assets (such as trust protectors)
• Sole permissible recipients of income or principal who have withdrawal rights
• Grantors or settlors who can revoke the trust or withdraw assets
• Beneficial owners of any entities that hold any of the above positions

In the Rodriguez family's case from our opening story, as LLC members, each family member who owns 25% or more (or exercises substantial control) must be identified as a beneficial owner.

What Transfers Are Exempt?

Not every non-financed transfer to an entity or trust requires reporting. The rule includes several important exemptions:

Exempt Transfer Types

• Easement grants and transfers
• Transfers resulting from death (inheritance through wills, trusts, intestacy, or beneficiary designations)
• Divorce or civil union settlements
• Bankruptcy estate transfers
• Court-supervised transfers
• No-consideration transfers by individuals to their own trusts
• 1031 like-kind exchanges under IRC Section 1031
• Transfers where no reporting person is involved

The 1031 exchange exemption is particularly relevant for Florida investors who frequently use these tax-deferral strategies when trading up properties.

Exempt Entity Types

Sixteen categories of entities are exempt, including:

• Securities reporting issuers (publicly traded companies)
• Banks and credit unions
• Insurance companies
• Registered broker-dealers
• Government entities
• Regulated investment companies
• Subsidiaries of the above

Exempt Trust Types

Four categories of trusts are exempt:

• Securities reporting issuer trusts
• Trusts where the trustee is a securities reporting issuer
• Statutory trusts
• Subsidiaries of exempted trusts

Most individual investors using standard LLCs or family trusts won't qualify for these exemptions. The exemptions primarily target institutional investors and regulated financial entities already subject to other reporting requirements.

How This Differs from Geographic Targeting Orders

If you've purchased property in certain Florida markets in recent years, you may have encountered Geographic Targeting Orders (GTOs). These were temporary, targeted requirements that FinCEN used to gather data about all-cash purchases in specific high-risk markets.

Key differences:

The new rule essentially takes the GTO concept and expands it dramatically: no geographic limitations, no purchase price thresholds, and permanent ongoing requirements.

How This Affects Your Closing Timeline

The most immediate practical impact for buyers: your closing cannot proceed until all required information is collected.

Consider what happened to a buyer in Tampa recently. David Chen was purchasing a $375,000 rental property through his investment LLC. His LLC had three members: himself, his wife, and his brother-in-law, who was a passive investor living in California.

The title company needed beneficial ownership information from all three members. While David and his wife provided documentation quickly, his brother-in-law was traveling internationally and couldn't immediately access the required information. The closing, originally scheduled for a Tuesday, had to be postponed until Friday.

Our recommendation: If you're purchasing through an entity or trust, begin gathering documentation before you go under contract.

How This Protects Legitimate Buyers

While the compliance burden is real, it's worth understanding why this rule exists and how it benefits you as a legitimate buyer.

Deterring Illicit Activity

Real estate has historically been vulnerable to money laundering because large sums can be moved through property purchases with relative anonymity. According to FinCEN, the U.S. residential real estate sector represents a significant vulnerability in the nation's defenses against money laundering. By requiring disclosure of beneficial owners, the rule makes it harder for bad actors to hide behind shell companies and artificially inflate prices.

Leveling the Playing Field

Legitimate buyers sometimes find themselves outbid by mysterious cash buyers whose funding sources are unclear. Greater transparency helps ensure everyone competes on equal footing.

Protecting Property Values

Money laundering in real estate can artificially inflate prices and destabilize markets. Deterring such activity helps maintain healthy, sustainable property values in Florida communities.

Title Integrity

At Title Warehouses of America, we've always believed that thorough due diligence protects our clients. Knowing exactly who is on both sides of a transaction helps us identify and prevent fraud, protecting your ownership rights. This is why title insurance remains essential, entity purchases included.

Filing Deadlines and Recordkeeping

When Must Reports Be Filed?

Reporting persons must file the Real Estate Report with FinCEN by the later of:

• The last day of the month following closing, OR
• 30 calendar days after closing

For example, if a transaction closes on March 15, 2026, the report must be filed by April 30, 2026 (the last day of the following month).

Recordkeeping Requirements

Reporting persons must retain copies of:

• Beneficial ownership certifications from transferees
• Any designation agreements

These records must be kept for five years.

Penalties for Non-Compliance

While FinCEN hasn't specified exact penalty amounts for this rule, the Bank Secrecy Act authorizes civil penalties up to $500 per day for violations. Criminal penalties for willful violations can include substantial fines and imprisonment.

For title companies and real estate professionals, compliance isn't optional. For buyers, the practical consequence is simple: the closing cannot proceed without required documentation.

Common Questions We're Hearing

"Does this affect my personal home purchase?"

Not if you're buying in your individual name. The rule only applies to transfers to legal entities (LLCs, corporations, partnerships) and trusts.

"I'm buying with cash but in my own name. Does this affect me?"

No. If you're purchasing as an individual (not through an entity or trust), the transaction is not reportable under this rule, regardless of whether you're paying cash.

"Does this apply if I'm refinancing?"

No. The rule only covers transfers of ownership. Refinancing an existing property you already own does not trigger reporting.

"What if I'm selling, not buying?"

Sellers provide less information than buyers, but the report will still include basic identifying information about the seller. If you're selling to a buyer who triggers reporting requirements, expect your title company to collect your name, address, and taxpayer identification number.

"What happens to the information that's reported?"

FinCEN maintains reported information in a secure database alongside other Bank Secrecy Act reports. The information is not publicly accessible. Strict limits govern who can access the data and how it can be used, primarily law enforcement and certain regulatory agencies.

"Can I still use an LLC to buy property?"

Purchasing real estate through LLCs and trusts remains completely legal and is still a valid asset protection and estate planning strategy. The new rule simply adds transparency requirements; it doesn't prohibit entity purchases.

"What about 1031 exchanges?"

Transfers completed as part of a like-kind exchange under IRC Section 1031 are exempt from reporting requirements. This is good news for Florida investors who frequently use 1031 exchanges.

"What if my LLC has multiple members?"

All beneficial owners must be identified. This includes anyone who owns or controls 25% or more of the LLC, and anyone who exercises substantial control over it.

"What if I don't provide the required information?"

Simply put: the closing cannot proceed. If you want to purchase property through an entity or trust using non-financed funds, you must provide the required documentation. There's no workaround.

"Can I be penalized for providing false information?"

Yes. Intentionally providing false or fraudulent information to evade reporting requirements carries serious penalties. Always provide accurate, truthful documentation.

How Title Warehouses of America Is Preparing

Through our partnership with Stewart Title, we've been implementing systems and processes to handle the new requirements efficiently:

Technology integration: We're utilizing Stewart's SureClose platform to securely collect and manage the additional documentation required under the new rule.

Staff training: Our team has completed comprehensive training on FinCEN requirements, including identifying reportable transactions and properly collecting beneficial ownership information.

Client education: We're proactively reaching out to real estate professionals and repeat clients to explain the new requirements before they encounter them at closing.

Streamlined workflows: We've developed checklists and procedures to gather required information early in the transaction process, minimizing closing delays.

Your Action Steps

If you're planning a property purchase through an LLC or trust in 2026, take these steps now to ensure a smooth closing:

Before You Go Under Contract

1. Review your entity structure. Identify all beneficial owners: anyone who owns 25% or more, or who exercises substantial control. For trusts, identify trustees, grantors, and beneficiaries with withdrawal rights.
2. Gather documentation in advance. Collect from each beneficial owner:
   • Full legal name (as it appears on government ID)
   • Date of birth
   • Current residential address
   • Citizenship or nationality
   • Taxpayer identification number (SSN or ITIN)
3. Locate your entity documents. Have your articles of organization, operating agreement, or trust instrument readily accessible.
4. Communicate with partners. If multiple people are involved in your entity, make sure everyone understands what documentation they'll need to provide and the timeline for providing it.

When You Go Under Contract

5. Inform your title company early. Let your title company know you're purchasing through an entity so they can send documentation requests immediately.
6. Build extra time into your schedule. Especially for transactions in early 2026, allow additional days in your closing timeline for documentation collection.
7. Respond promptly to requests. Delays in providing beneficial ownership information directly delay your closing.

For Ongoing Investors

8. Create a "closing-ready" folder. For each entity you use for real estate investment, maintain a folder containing all documents your title company will need.
9. Review your entity structure annually. If ownership percentages change or new members join, update your documentation accordingly.
10. Work with experienced professionals. Choose a title company that understands the new requirements and can guide you through compliance smoothly.

Related Reading:

Understanding the full picture of Florida real estate transactions helps you prepare for these changes:

• What is Title Insurance and Do You Really Need It? - Why title insurance remains essential for entity purchases and how enhanced coverage protects your investment
• 5 Real Florida Title Issues That Cost Buyers Thousands - The most expensive title problems facing Florida buyers, including fraud schemes that new transparency rules aim to deter
• Florida Closing Costs Calculator: Who Pays What in 2025 - Complete breakdown of closing costs for Florida transactions
• The Complete Orlando Home Closing Process - Step-by-step guide to what happens from contract to keys

The Bottom Line

The FinCEN Real Estate Rule represents the most significant change to residential real estate closing procedures in decades. For Florida buyers using LLCs, trusts, or other entities for all-cash or privately-financed purchases, preparation is essential.

The good news: with proper planning and the right title company, compliance shouldn't derail your transaction. The rule doesn't prevent entity purchases or add prohibitive costs. It simply requires disclosure of who actually owns the purchasing entity, information that legitimate buyers can readily provide.

At Title Warehouses of America, we've handled complex Florida closings for nearly 20 years. Our partnership with Stewart Title means we have the resources, technology, and expertise to navigate these new requirements while keeping your closing on track.

Have questions about how the FinCEN rule affects your upcoming purchase? Our team is ready to help. Whether you're a first-time investor setting up an LLC or a seasoned buyer with multiple entities, we'll guide you through the process with the same transparency and efficiency our clients have trusted since 2006.

Contact Us

Title Warehouses of America - Your Orlando title company for transparent, reliable closings.

Phone: 321-234-2783

Address: 6200 Metrowest Blvd, Suite 204, Orlando, FL 32835

Email: [email protected]

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Disclaimer: This article provides general information about FinCEN's Residential Real Estate Rule and should not be considered legal or tax advice. FinCEN rules and requirements may be subject to change; the effective date was postponed from December 1, 2025 to March 1, 2026 via exemptive relief issued September 30, 2025. Consult with qualified legal and tax professionals regarding your specific situation. Information is current as of January 2026.