FAQs About FinCEN’s New Residential Real Estate Reporting Rule: What Condo Associations and Co-ops Need to Know

Effective March 1, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has implemented a new rule requiring reporting for certain residential real estate transfers. In most transactions, residential condominium associations and co-ops will not be required to report to FinCEN; only in certain rare and atypical situations will a residential condominium association or co-op be required to report. Text of this new rule (31 C.F.R. § 1031.320) is available here.

For answers to some frequently asked questions about this development, read on.

When will a residential condominium association or co-op be required to report?

Only for (i) transfers that are not exempt and (ii) when there is no other “reporting person.” If the transaction is not a reportable transfer, or there is another reporting person, residential condominium associations and co-ops will not be required to report or take any action under the new rule.

What transactions are exempt under this new reporting rule?

Many transfers are exempt under this new rule and thus there will be no reporting requirement. Exempt transfers include:

• Transfers that are financed (mortgage or other qualifying institutional loan secured by the property);

• Transfers to individual(s) (rather than entities such as trusts, LLCs, etc.);

• Transfers that fall within a specific listed exemption under the rule, such as death, divorce, bankruptcy, court‑supervised transfers, certain family trusts, or 1031 intermediaries; and

• Transfers that occur before the March 1, 2026, effective date of the new rule.

For example, a transfer of a residential condominium unit or co-op shares to a trust with no financing occurring after March 1 is likely not exempt.

When will a residential condominium association or co-op have the obligation to report any such transaction as a “reporting person”?

Rarely. Only if there is no other reporting person for a reportable or non-exempt transfer.

The rule sets a cascading list/hierarchy for determining who is the designated reporting person (mostly professionals involved with the transaction). Last on the list is the preparer of the deed or co-op stock certificate.

Because co-ops prepare stock certificates, often through the management company or counsel, it is recommended that for residential co-op transfers occurring after March 1 with no financing where the buyer is a trust or other entity (i.e. not a person or persons), the co-op managing agent or board verify with its legal counsel whether the co-op will be a reporting person.

Because condominium associations are rarely involved in preparation of a condominium unit deed, they will almost never be a reporting person, but they should consult with their legal counsel if there is any question on this issue, as there is no blanket exemption for condominium associations.

Key Takeaways:

• Starting March 1, 2026, certain cash purchases of certain residential real estate — including condominium units and co‑op shares — by entities or trusts trigger a new federal reporting obligation.

• The rule is transaction‑specific and narrowly targeted; it will not apply to all purchases of residential condominium unit or co-op shares.

• In the vast majority of cases, residential condominium associations or co-ops will not be required to report. Only in certain rare and atypical situations will a residential condominium association or co-op be required to report under this new rule.

LP is committed to keeping our community association clients informed of, and prepared to proactively and successfully navigate, any changes in the law. For questions regarding this new reporting requirement imposed by FinCEN, or other issues facing your condominium or community association or co-op, please contact Howard Dakoff, Laura Marinelli, Adam Kahn, or Molly Mackey of LP’s Community Association Group.