04/24/2026
Only weeks after a new FinCEN residential real estate reporting rule came into effect, a federal court decision vacated the rule, creating uncertainty for the future of the rule.
FinCEN’s anti-money laundering rule aimed to increase transparency in real estate transactions and help prevent the use of anonymous entities to conceal illicit funds. The rule applied to non-financed transfers of residential real estate where property was transferred to non-person legal entities such as corporations, LLCs, and certain trusts. It required reporting persons, such as title companies and attorneys, to file a report for these non-financed transfers
In the recent case, Flowers Title Cos., LLC v. Bessent, the U.S. District Court for the Eastern District of Texas ruled that FinCEN exceeded its statutory authority under the Bank Secrecy Act. On March 19, 2026, just weeks after the final rule took effect on March 1, 2026, the court granted summary judgement in favor of the plaintiff, vacating the rule nationwide. As a result, FinCEN posted the following alert on its platforms:
“In light of a federal court decision, reporting persons are not currently required to file real estate reports with FinCEN and are not subject to liability if they fail to do so while the order remains in force.”
Although the rule is currently unenforceable and reporting persons are not required to fill out reports, uncertainty remains. Two other recent federal court cases have upheld FinCEN’s rule as lawful and constitutional. Additionally, there is a possibility that the decision reached in Flowers Title Cos., LLC v. Bessent could be appealed. This leaves the possibility open for future changes to the real estate regulatory landscape.
While the rule remains vacated for the moment, interested parties should stay informed and be prepared to adjust if requirements are reinstated or modified. Regular monitoring of current legal developments will be key to navigating this evolving area.