Federal Court Vacates FinCEN Residential Real Estate Reporting Rule

April 2, 2026

Update: Federal Court Strikes Down FinCEN Residential Real Estate Reporting Requirement

Amy Montgomery Dentons + Follow Contact LinkedIn Facebook X Send Embed

On March 19, 2026, the United States District Court for the Eastern District of Texas issued an order (the “Order”) in Flowers Title Companies, LLC v. Bessent, et al., vacating the Federal Crimes Enforcement Network (“FinCEN”) Residential Real Estate Rule (the “Rule”).

The article below supplements our previous article, addressing the current status of the FinCEN reporting obligation and recommendations going forward.

Background

The FinCEN Rule took effect on March 1, 2026. It required certain professionals involved in real estate transactions to file a “ Real Estate Report ” with FinCEN for any non-financed transfer of residential real property to a transferee entity or transferee trust. The Rule applied nationwide, had no minimum dollar threshold, and carried significant civil and criminal penalties for noncompliance.

The Court's Decision

In Flowers Title Companies, LLC v. Bessent, et al., a title company challenged the Rule, claiming that FinCEN exceeded its statutory authority. The court agreed, concluding that the Rule exceeded FinCEN's statutory authority and, in its Order, the court vacated the Rule in its entirety.

What this means for reporting persons

As a result of the Order, reporting persons are not currently required to file and face no liability for not filing Real Estate Reports with FinCEN while the Order remains in force. Reporting persons may still file reports voluntarily during this period, but there is no obligation to do so. FinCEN's website confirms this, stating:

“ALERT: 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.”

Recommended Best Practices

It is important to note that the Order could be appealed by the government, which means the Rule and its corresponding reporting requirement may ultimately be revived if the government wins on appeal.

Therefore, we recommend continuing to gather the information needed for reporting while the Order is in force. If the Rule is revived, reporting persons may need to file Real Estate Reports retroactively for transactions that occurred during the suspension period.

By continuing to gather the necessary information now and holding off on filing while the Order is in force, reporting persons will be prepared to comply promptly if the Rule is reinstated, without the burden of tracking down and obtaining transaction data after the fact. This approach allows reporting persons to remain in a position of readiness while avoiding unnecessary filings during a period of legal uncertainty.

Looking Forward

We will continue to monitor this matter closely. Given the significant penalties associated with the Rule, it remains prudent to stay prepared for the possibility that the Rule may be reinstated.

Resources:

• Flowers Title Companies, LLC v. Bessent, et al., Case No. 6:25-cv-127-JDK (E.D. Tex. Mar. 19, 2026)
• Residential Real Estate Rule | FinCEN.gov
• BSA-E Filing System
• FinCEN Fact Sheet
• New FinCEN Real Estate Reporting Rule

Send Print Report

Related Posts

• New FinCEN Real Estate Reporting Rule
• FTC Non-Competes Public Meeting
• Your Wallet's New Reality: The Financial Truth About Life After Divorce

Latest Posts

• Update: Federal Court Strikes Down FinCEN Residential Real Estate Reporting Requirement
• 2026 Iowa Legislative Session – Week 11 See more »

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
Attorney Advertising.

©
Dentons

Written by:

Dentons Contact + Follow Amy Montgomery + Follow more less

PUBLISH YOUR CONTENT ON JD SUPRA

• ✔ Increased readership
• ✔ Actionable analytics
• ✔ Ongoing writing guidance Join more than 70,000 authors publishing their insights on JD Supra

Start Publishing »

Published In:

Anti-Money Laundering + Follow Appeals + Follow Federal Court Litigation + Follow FinCEN + Follow Government Agencies + Follow Real Estate Transactions + Follow Real Estate Transfers + Follow Reporting Requirements + Follow Statutory Interpretation + Follow Vacated + Follow Administrative Agency + Follow Finance & Banking + Follow Residential Real Estate + Follow more less

Dentons on:

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra: Sign Up Log in ** By using the service, you signify your acceptance of JD Supra's Privacy Policy.* - hide - hide