FinCEN Update, September 2026: The Residential Real Estate Rule Is Still Vacated and the Appeal Is Live

Short answer, as of September 2026: you are not filing Real Estate Reports, and you are not liable for failing to file them. The rule is vacated.

But the case is on appeal, the government filed its opening brief last month, and a second case in Florida went the other direction. This is not over.

We have covered this rule twice before, in The New FinCEN Rule Is Now in Effect and then in Update: The FinCEN Real Estate Reporting Rule Has Been Struck Down. Here is where it actually stands now, and what to do with your files in the meantime.

Current Status

FinCEN's own Residential Real Estate newsroom carries the operative language. Following the March 19, 2026 court order, reporting persons are not required to file Real Estate Reports with FinCEN and are not subject to liability if they fail to do so.

FinCEN and the Department of Justice have appealed. The court's order remains in effect while that appeal is pending.

That is the whole compliance posture right now. No filing obligation. No penalty exposure for not filing. FinCEN maintains its Residential Real Estate FAQs if you want the agency's own wording.

How We Got Here

The timeline matters, because it explains why so many agents and title companies are still confused about whether they owe a filing.

• August 28, 2024. FinCEN issues the final Residential Real Estate Rule, requiring reports on certain non-financed transfers of residential property to legal entities and trusts.

• September 30, 2025. FinCEN postpones the compliance date, moving reporting obligations to March 1, 2026.

• March 19, 2026. Judge Jeremy Kernodle of the U.S. District Court for the Eastern District of Texas vacates the rule nationwide in Flowers Title Companies, LLC v. Bessent.

• May 11, 2026. The government appeals the vacatur to the Fifth Circuit.

• August 17, 2026. The Department of Justice files its opening appellate brief defending the rule.

The postponement pushed the compliance date to March 1. The vacatur landed on March 19. The rule was technically live for about eighteen days before it was struck down, and that is the source of most of the confusion in the field.

What the Court Actually Held

The decision was about statutory authority, not about whether money laundering through all cash real estate purchases is a real problem.

FinCEN claimed two sources of authority under the Bank Secrecy Act. The court rejected both.

Under 31 U.S.C. 5318(g)(1), FinCEN may require reporting of suspicious transactions. The court found that treating every non-financed residential transfer to an entity or trust as categorically suspicious had no support in the statute.

A whole category of ordinary transactions is not the same thing as a suspicious transaction.

Under 31 U.S.C. 5318(a)(2), FinCEN claimed authority to require the maintenance and reporting of information. The court held that reading contradicted the natural meaning of the statute.

The vacatur applies nationwide, not just to the plaintiffs.

The Florida Case and Why the Appeal Matters

A separate challenge brought by Fidelity National Financial in Florida produced the opposite result. In December 2025, a magistrate judge recommended rejecting the challenge entirely, concluding FinCEN had adequate authority and the rule should stand.

Two federal courts reaching opposite conclusions on the same rule is how cases reach the Supreme Court. If the Fifth Circuit reverses Judge Kernodle, or if the Florida track produces a conflicting appellate ruling, the reporting obligation comes back.

Possibly with short notice, the way the March 1 compliance date did. Plan accordingly. A rule that was postponed twice and then vacated is not a rule that has gone away.

What Agents and TCs Should Do Now

Do not file. There is no obligation and no benefit. FinCEN has said so directly.

Do not tell clients the rule is dead. It is vacated pending appeal. Those are different things, and the distinction matters if you are the one who told a client otherwise.

Keep the intake habit. The rule targeted non-financed residential transfers to legal entities and trusts. If your file is an all cash purchase vesting into an LLC, a corporation, or a trust, note it. If reporting returns, you will want that information already in the file rather than reconstructed under a deadline.

Coordinate with title and escrow, not around them. Under the rule's cascade, the reporting obligation fell primarily on settlement agents and title companies, not on the listing or selling agent. That structure would return with the rule. Know which party in your transactions would carry it.

Watch the Fifth Circuit. Briefing is underway. A decision in the next several months would settle the near term question.

Where This Fits in the Broader Compliance Picture

2026 has been a heavy year for rule changes affecting California files. The MLS side shifted again, which we covered in NAR Just Changed the MLS Rules. The forms side moved in June, covered in June 2026 C.A.R. Form Updates and Changes. California also has its own obligations on rapid resale transactions, covered in New Flipper Rule for California.

The agents getting through this cleanly are the ones with a system that absorbs a rule change instead of reacting to it. The agent still owns the file. A transaction coordinator keeps the documentation and the dates from becoming the bottleneck.

We described the actual scope of that support role in What Does a Transaction Coordinator Actually Do?, and what it costs to work without one in Top 10 Mistakes California Agents Make Without a Transaction Coordinator.

Bottom Line

No filing required today. No liability for not filing. The order is being appealed, a conflicting decision exists in Florida, and the obligation can return.

Keep your entity and trust purchases flagged, keep your title partners in the loop, and check FinCEN's newsroom before you tell a client anything definitive.

We will update this post when the Fifth Circuit rules.

AIDE supports compliance documentation and deadlines for agents and teams across California. See our services, or learn to run the file yourself through the AIDE TC Training Course.

AIDE Transaction Coordination | aide-re.com | support@aide-re.com