A Real Estate Report cannot be completed without information that only the transferee can supply. This article explains FinCEN’s position when a transferee withholds that information, the options available to the reporting person, and how to prevent the situation from arising at closing.
Current status (October 2026): The Residential Real Estate Rule was vacated by a federal court on March 19, 2026 and is not currently enforceable. FinCEN has appealed, and the rule may be reinstated. The requirements below apply when the rule is in effect. For the current legal position, see Is the FinCEN Real Estate Report Still Required in 2026?
The obligation does not depend on cooperation
The duty to file rests with the reporting person, identified under the cascade described in Who Must File the Real Estate Report or by a designation agreement. FinCEN has confirmed that there is no exception from reporting when a transferee fails to cooperate. A transferee’s refusal is not a basis for not filing.
Incomplete reports are not permitted
A Real Estate Report must contain all required information when it is submitted, and a reporting person that fails to report required information may be subject to penalties. Filing a partial report with a note that the transferee declined to cooperate does not satisfy the obligation. The applicable penalties are set out in Penalties and Liability Under the Real Estate Rule.
Steps available to the reporting person
Request the information directly. Where information cannot be obtained through another professional involved in the transaction, FinCEN expects the reporting person to contact the relevant party, usually the transferee, directly.
Rely on contractual terms. FinCEN has indicated that reporting persons may, though they are not obligated to, include language in client agreements stating that they will not perform their role in a reportable transfer unless the client provides the information required for a complete report. Such a provision sets expectations at engagement and gives the reporting person a clear basis for its position.
Consider declining to proceed. FinCEN’s regulations do not dictate whether a reporting person should close a particular transaction. FinCEN has stated, however, that a reporting person unable to collect all required information may consider declining to perform the function that triggers the reporting obligation, and should consider whether to proceed at all without the information unless it is reasonably certain to obtain it soon after closing.
Proceeding without the information
Because the filing deadline falls between 30 and 60 days after closing, as explained in Real Estate Report Filing Deadlines, information can technically be collected after closing. Relying on that window carries risk. Once the transaction has closed and funds have been disbursed, the reporting person has less leverage to obtain the information, while the filing obligation remains. Collecting the information and the written beneficial ownership certification before closing is the more reliable practice.
Suspicious Activity Reports
The rule does not require persons involved in real estate closings to file Suspicious Activity Reports. A reporting person may, however, voluntarily file a SAR where it knows, suspects, or has reason to suspect that a transaction is related to a possible violation of law or regulation. FinCEN has identified one such instance: a party withholding required information that the reporting person knows, suspects, or has reason to suspect was withheld to avoid the report being filed.
Three points govern a voluntary SAR in this context.
A SAR does not replace the Real Estate Report. Filing a SAR does not relieve the reporting person of the obligation to file a Real Estate Report for a reportable transfer.
The SAR may not be disclosed. The Bank Secrecy Act generally prohibits disclosing a SAR or any information that would reveal its existence, and civil and criminal penalties apply to unauthorized disclosure. A reporting person may not tell a transferee that a SAR has been or will be filed because of its refusal.
The Real Estate Report may be disclosed. A reporting person may inform the parties to a reportable transfer that it is filing a Real Estate Report in connection with the transfer.
Preventing the problem
Most refusals stem from surprise rather than intent. Offices can reduce them by raising the requirement early.
Disclose the requirement at engagement. Engagement letters and intake materials should state that, for reportable transfers, the transferee must provide beneficial ownership and payment information and sign a certification.
Screen transactions at intake. Identifying reportable transfers when an order is opened, using What Qualifies as a Reportable Transfer and Non-Financed Transfers Under the Real Estate Rule, allows the information request to be made weeks before closing rather than days.
Explain the protections. Buyers are more willing to provide information once they understand that Real Estate Reports are not public and are exempt from disclosure under the Freedom of Information Act. The Real Estate Report: Questions From Entity and Trust Buyers can be shared with clients for this purpose.
Make the certification a closing condition. The written beneficial ownership certification protects the reporting person’s reliance on the information, as explained in Beneficial Ownership Under the Real Estate Rule, and should be in the file before closing.
Assistance with difficult transactions
Where a transferee is reluctant to provide information, early intervention is usually decisive. For guidance on a specific transaction, or for client-facing materials that explain the requirement, contact us.
