Real estate professionals who handle closings for legal entities and trusts are asking a direct question: is the FinCEN Real Estate Report currently required? As of June 2026, the answer is no. A federal court vacated the Residential Real Estate Rule in March 2026, and FinCEN has confirmed that reporting persons are not obligated to file. However, the rule is under appeal, and its status may change. This article explains the current position and what closing professionals should do now.
Current status of the Residential Real Estate Rule
The Residential Real Estate Rule was finalized in 2024 and took effect on March 1, 2026, following a delay from its original December 1, 2025 date. It required certain professionals involved in residential closings to file a Real Estate Report with FinCEN for non-financed transfers of residential property to legal entities and trusts.
On March 19, 2026, the U.S. District Court for the Eastern District of Texas vacated the rule in its entirety in Flowers Title Companies, LLC v. Bessent. The court granted summary judgment against the government and set the rule aside nationwide, holding that FinCEN had exceeded its statutory authority under the Bank Secrecy Act. The court found that the agency had not adequately demonstrated that all non-financed residential transactions are categorically suspicious, and it rejected FinCEN’s argument that a separate statutory provision authorized the reporting requirement.
Filing obligations during the vacatur
FinCEN has stated on its website that, while the court’s order remains in effect, reporting persons are not required to file Real Estate Reports and are not subject to liability for failing to do so.
FinCEN has also clarified the treatment of transactions occurring during this period. If the rule is reinstated, reporting persons will not be required to retroactively file reports for transfers that closed while the court’s order was in effect. No filing backlog is accruing during the vacatur.
FinCEN’s appeal to the Fifth Circuit
On May 11, 2026, FinCEN filed a notice of appeal with the U.S. Court of Appeals for the Fifth Circuit, seeking to reverse the district court’s decision and restore the reporting requirement.
The broader legal picture is unsettled. A federal court in Florida previously upheld the rule, and a separate court reached its own conclusion, creating a split among trial courts that increases the likelihood of appellate review. Two outcomes are possible. The Fifth Circuit may resolve the appeal on the merits, a process that can take several months. Alternatively, the government may request an emergency stay of the vacatur; if granted, the rule would return to effect while the appeal proceeds. No stay has been granted to date.
Recommended actions for reporting persons
Reporting persons should not file Real Estate Reports during the vacatur, as permitted by FinCEN’s guidance. They should, however, continue to capture entity and trust transaction details that would have been reportable, since much of this information overlaps with existing underwriting and intake requirements, and maintaining it would preserve continuity if the rule returns. Intake procedures and certification steps developed before March 1, 2026, should remain in place rather than being dismantled.
Offices should also assign responsibility for monitoring the appeal, either internally or through a service partner, so that any status change is identified promptly. The policy objective behind the rule — greater transparency in non-financed entity purchases of residential property — remains a federal priority, and a revised or narrower rule may follow regardless of the appeal’s outcome.
