The U.S. Department of the Treasury has announced that enforcement of the FIN CEN Residential Real Estate Reporting Rule is on hold following a court decision in Texas to vacate the Rule.  The Rule, which took effect on March 1, 2026, imposed reporting obligations on certain non-financed residential real estate transactions that involve LLCS, corporations, trusts, and other entities. Two recent federal district court decisions have created immediate uncertainty regarding the future of The Rule. The U.S. District Court for the Eastern District of Texas vacated the Rule in its entirety in Flowers Title Companies, LLC v. Bessent, et al.:

• The court held FinCEN exceeded its statutory authority.
• It found the agency improperly labeled all covered transactions as “suspicious” without sufficient justification.
• It rejected reliance on procedural authority to justify substantive reporting mandates.

Takeaway: Ruling eliminated the Rule nationwide, unless it’s stayed or is overturned on appeal.

The Texas decision conflicts with an earlier decision made by the U.S. District Court for the Middle District of Florida in Fidelity National Financial, Inc. v. Treasury, to uphold the rule. FinCEN is likely to appeal, and a stay could be requested.

Bottom Line

Until the litigation is resolved, it makes sense to treat the Rule as inactive and avoid incorporating it into form agreements. FinCEN’s website even states that “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.”

For more information, contact the RIAR Legal Department at [email protected].