New real estate rules for cash transactions are aimed at money laundering
Posted By: Toledo Blade on February 26, 2026. For more information, please click here to read the source article.
A new financial reporting rule aimed at combating money laundering will affect some real estate transactions starting Sunday.
The new rule, promulgated by the Financial Crimes Enforcement Network, or FinCEN — a bureau of the U.S. Treasury — applies to corporations and trusts that purchase real estate for cash. FinCEN will now require both buyers and sellers to complete and file multipage forms documenting the source of the funds used to make the purchase.
“The entire purpose of money laundering is to conceal illegal proceeds and make them appear legitimate,” said Susan Licate, a public affairs officer with the FBI. “Criminals also use shell companies, trusts, and straw purchasers to obfuscate the true ownership of assets. Any reporting requirements that help investigators trace ownership of these illicit funds or assets back to the source will likely deter bad actors from using that method of money laundering.”
The local real estate industry is preparing for the new reporting requirements.
“The seller will have to fill out a six-page document, and the buyer will have to fill out a nine-page form,” said Dan McQuillan, the president and owner of Danberry Realtors. “Title companies have to report every 30 days all the cash transactions they had. If I was buying the property as Dan McQuillan, I wouldn’t have to do this, but if I bought one as Dan McQuillan LLC, I would have to go through that.”
Jim Lindsay, the CEO and legal counsel for Louisville Title, said the new rules could involve up to 25 percent of the company’s transactions.
“It’s not looking like it will cause a lot of extra work for us,” said Lexie Foster, the director of Louisville’s residential division. “We’ve already started collecting the information for transactions that will take place in March. We’ve educated investors and clients about what’s coming.”
The burden of ensuring the forms are completed properly will fall on title companies.
“We’re becoming the last compliance checkpoint for nonfinanced transactions,” Mr. Lindsay said. “We can’t skip anything on that form. If we close without that, we get fined $591 a day with a cap of $10,000, plus possible imprisonment.”
Since title companies will be assuming that liability, Mr. Lindsay predicts there will be costs added to the title company’s charges.
“I’m sure there will be a cost,” he said. “There is liability there on the settlement agent, who will have additional responsibilities and work to do. If [a buyer] is setting up an LLC and paying with cash, they will need to report.”
Mr. Lindsay stressed that disclosure forms are not public documents.
“They’re not sent to anyone but FinCEN,” he said.
Joseph Patituce, a criminal defense attorney with offices in eight Ohio locations, characterized the new regulations as “nonsensical.”
“I think it’s completely ineffective,” he said. “It will hamper legitimate business deals, and I don’t know that it prevents any substantial amount of crime. It’s not as if there are scores of cash transactions out there that are going unnoticed. Banks already report to the IRS or the government any cash transactions over $10,000.”
Mr. Patituce said the current laws on reporting cash transactions take about 10 seconds to comply with, while the new regulations and the 15 pages of forms they require will take much longer.
Toledo Attorney Laurie Watson said she is concerned that the new rules may ensnare honest people who have a do-it-yourself approach to real estate.
“I see a trend toward people trying to do things for themselves without assistance of counsel,” she said. “Those are the people I worry about — those who don’t get professional advice.”
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