Reporting Rules, Co-op Deadlines, Seller Disclosures, and Wire Fraud

By Rausa Russo Law, PLLC • Issue 01 • October 14, 2026 • Last reviewed October 2026 by Rausa Russo Law

Welcome to The Closing Brief, a short, occasional update from the Real Estate & Closings practice group of Rausa Russo Law, PLLC. Four items this issue: a federal reporting rule that a court has vacated (the ruling is on appeal); new deadlines for co-op boards; a change for home sellers; and a fraud warning for anyone wiring closing funds.

1. FinCEN’s Residential Reporting Rule: Vacated, With an Appeal Pending

FinCEN’s residential real estate reporting rule was written to cover many non-financed transfers of residential property to legal entities (such as LLCs and corporations) and trusts. The rule took effect for transfers on March 1, 2026; a federal court vacated it on March 19, 2026 (Flowers Title, E.D. Tex.), and the government’s appeal to the Fifth Circuit is pending. According to FinCEN, while that order remains in force, reporting persons “are not required to file Real Estate Reports” and “are not subject to liability if they fail to do so.” The rule was vacated, not repealed, so buyers planning to take title in an LLC or trust should check its status before closing.

Separately, under FinCEN’s beneficial ownership final rule effective August 14, 2026, companies formed in the United States do not file beneficial ownership reports with FinCEN (an exemption first adopted in a March 2025 interim final rule); the reporting requirement now applies only to certain foreign-formed companies. Read: Buying New York Property in an LLC →

2. Co-op Board Deadlines in New York City and Westchester

New York City’s Local Law 58 of 2026 became law when the City Council overrode a mayoral veto on January 29, 2026. It requires covered co-op boards to acknowledge receipt of application materials within 15 days and to state their consent or denial within 45 days after an application is complete, with limited extensions. The Department of Housing Preservation and Development (HPD) enforces the law, with civil penalties of $1,000 for a first violation, $1,500 for a second, and $2,000 for each later violation. The law took effect July 28, 2026, and applies to applications made on or after that date. If a board does not acknowledge an application within 15 days, the application is deemed complete; a board may extend the 45-day decision deadline once, by up to 14 days, on notice; and, if the board has adopted a written summer recess notice (kept in its records and available on request), the 15-day acknowledgment deadline is paused during the July–August recess, and the 45-day decision deadline is paused if it would otherwise end during the recess. The law does not cover buildings with fewer than 10 dwelling units, housing development fund companies (HDFCs), or co-ops whose share sales require a governmental housing agency’s approval. A separate City Council bill, Int. No. 774 of 2026, would require boards to give a written statement of their reasons for withholding consent; as of October 2026 it is pending in committee, not law.

In Westchester County, according to the County Human Rights Commission, co-op boards must acknowledge a completed application (or identify its defects) within 15 days, approve or reject it within 60 days after receiving a completed application, and state the reason in any rejection notice. Read: Buying a Co-op in New York →

3. Selling a House? The $500 Disclosure Credit Is Gone

Since March 20, 2024, under Chapter 484 of the Laws of 2023, a seller of a covered one- to four-family home can no longer give the buyer a $500 credit instead of delivering the Property Condition Disclosure Statement. The seller must complete, sign, and deliver the statement before the buyer signs a binding contract of sale, and a copy signed by both parties is attached to the contract. The 2023 amendment also added flood-related questions to the form, and according to a New York State Association of REALTORS® legal update, an amended form with a septic-system paragraph has been required since July 1, 2025. The disclosure law does not apply to co-op apartments or condo units, and certain transfers, such as transfers by an estate fiduciary, are exempt. Read: The Property Condition Disclosure Statement After the 2024 Changes →

4. Closing Wire Fraud: Verify Before You Wire

The FBI’s Internet Crime Complaint Center (IC3) received 24,768 business email compromise complaints in 2025, with about $3.05 billion in reported losses. Business email compromise is the category that covers closing wire fraud, although the report does not separate out losses tied to real estate closings. The scam often arrives as a convincing email that appears to come from your attorney, title company, or loan officer, announcing a last-minute change to wiring instructions. The FTC’s advice on such a request: “Don’t do it — it’s a scam.”

Before wiring, we recommend confirming the instructions by phone with a trusted representative, using a number you already know rather than one in the email. If you discover a fraudulent transfer, the FBI advises contacting your financial institution immediately to request a recall of the funds, and filing a complaint at ic3.gov. A practical approach is to report the transfer to your bank as fraudulent right away by phone, then follow up in writing to create a record. Which laws apply to a stolen wire can depend on how the payment was made; federal courts are divided on some of these questions, and the issue is on appeal. Banks and other parties may have their own responsibilities, and some deadlines to act are short. If closing funds are stolen, talk to an attorney promptly about your options. See our guide to drained bank accounts and unauthorized transfers. Read: Closing Wire Fraud →

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This issue was posted on the web on October 14, 2026. Laws and figures change; the information above is current as of that date.