A recap of recent resources, updates and guidance from IAR's Legal Department.
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FinCEN Real Estate Reporting Rules Effective MARCH 1st:
How new federal anti-money laundering requirements affect REALTORS® with all-cash closings
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New reporting rules for all-cash real estate transactions where the Buyer is an entity (business or trust) – not an individual – take effect on March 1st.
IAR General Counsel Richelle Cohen Mossler covers the basics in this video update:
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The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is implementing new regulations to combat money laundering and other illicit activities – including reporting on certain all-cash real estate transaction starting March 1st.
- Specifically, settlement agents will be required to submit reports on non-financed (all-cash) real estate transactions where the buyer is an entity (a business or trust, not an individual).
- Title companies are primarily charged with carrying out the new FinCEN rules; real estate brokers don’t have reporting responsibilities.
- But REALTORS® obviously have a stake in making sure required information is collected and submitted in a timely manner to avoid delays or disruptions at closing.
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Managing Brokers should be aware of the FinCEN requirements and sharing details with brokers; it’s also important to communicate with the title companies you work with on a regular basis to understand their procedures and timelines for completing the new reports.
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But while REALTORS® should work closely with title agents and others in the reporting hierarchy and work to educate and assist clients who may be impacted by the FinCEN Real Estate Reporting Rule, you should not be completing forms on behalf of a client.
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Article 10 Compliance and Case Examples: |
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REALTORS®, in their capacity as real estate professionals, in association with their real estate businesses, or in their real estate-related activities, shall not harass any person or persons based on race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity.
As used in this Code of Ethics, harassment is unwelcome behavior directed at an individual or group based on one or more of the above protected characteristics where the purpose or effect of the behavior is to create a hostile, abusive, or intimidating environment which adversely affects their ability to access equal professional services or employment opportunity.
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Last summer, we reported on changes to Article 10 of the REALTOR® Code of Ethics adopted by the NAR Board of Directors – the new language is depicted in bold above.
At the time, we emphasized that new language in the first paragraph does not mean you have to be working as a REALTOR® with a client to risk violating Article 10 with harassing behavior. Posting a comment on Facebook, if your page also promotes your real estate business, or actions at a social outing sponsored by your brokerage would still fall under Article 10.
The best approach is obviously for REALTORS® to follow the principles of the Code of Ethics in all activities. But Article 10 compliance requires education as well as effort: Violations aren’t always obvious and typically don’t come out of any intent to discriminate or steer. REALTORS® are focused on addressing client concerns and being responsive to requests, and it’s easy to cross the line on Article 10 by reacting to an inappropriate question or comment without fully considering the implications.
In this video, IAR Director of Professional Standards Laura Sallie and General Counsel Richelle Cohen Mossler cover these concepts and walk through several brief scenarios to illustrate common issues:
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Selecting a Title Company, RESPA and Referral Disclosures: |
During recent local association and brokerage visits, we’ve fielded a number of questions about settlement services. One issue that has come up several times: Does the Buyer or Seller have the final say on the selection of the title company? Members also want to be current on the requirements for disclosing business relationships and compensation (e.g. referral fees) with providers like title, mortgage and home insurance companies.
In response, we wanted to provide a brief refresher on these issues as you plan a busy year of closings! Click below to download the full document and scroll down for the highlights:
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- Who picks the title company? The party responsible for the selection of the title company can be designated in the Purchase Agreement; if the parties do not agree, the Seller cannot make the transaction contingent on selection of the title company.
- Accepting or receiving fees (or any consideration of value) for referring settlement service business is prohibited under the Real Estate Settlement Procedures Act (RESPA) – brokers should not be accepting referral fees from title companies or mortgage lenders for transactions that fall under RESPA (which applies to any transaction involving federally-related financing).
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Beyond straightforward referral fees, RESPA prohibits receiving ‘things of value’ from settlement providers, especially goods or services that you would otherwise have to pay for as business expenses, and that parties pay their full share of any joint costs.
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It is acceptable to refer clients to an affiliated settlement provider – for example, if your brokerage has an ownership stake or subsidiary relationship with a title or mortgage company, as long as the relationship is disclosed and the client understands that they are not required to use the affiliated business.
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RESPA does not impact broker-to-broker real estate referral fees; it also doesn’t cover referrals of non-settlement service providers (for example, recommending a painter, contractor or home security company), but any compensation from these providers to the REALTOR® would likely require client disclosure and consent under Article 6 of the Code of Ethics.
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As we look forward to spring, we hope you're familiar with and seamlessly using the 2026 editions of IAR's statewide legal forms. As a final refresher, click below for a summary of this year's changes to the Purchase Agreement (Improved Property) (Form #02) and Unimproved Property (Form #34), Buyer’s Inspection Response – Conditional Acceptance (Form #05A-D) and Addendum to Purchase Agreement First Right Contingency (Form #24), as well as an overview of two new forms: The Leased Property Addendum to the Purchase Agreement (Form # 74) and a Buyer’s Notice of Termination (Form #75).
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Managing Broker Reminder: Legal Hotline Access |
For Managing Brokers, a quick reminder: Please take a moment to review access you may have granted to office managers or other designees to contact the IAR Legal Hotline on behalf of your business and make any necessary changes using our new (and easy) online process:
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Log in to RAMCO using your M1 (NRDS) membership number and password (most default passwords are initially set as your last name in all-lowercase characters, though you may have reset it).
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Look for a button under your name reading ‘Manage Legal Hotline Access.’
- Review the list of licensees under your supervision – access to the Legal Hotline is indicated with ‘Yes’ or ‘No,’ and you can make a change by clicking ‘Edit’ next to the current designation.
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Please look for any outdated information – e.g. licensees who may have moved to other brokerages – and consider the appropriate balance between convenience, liability and day-to-day necessity as you manage access to the Hotline.
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| AARON LUTTRULL
2026 IAR Chair
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Indiana Association of REALTORS®
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