A recent decision from the U.S. District Court for the Eastern District of Texas has temporarily upended FinCEN’s new residential real estate reporting regime. In Flowers Title Companies, LLC v. Bessent, the court granted summary judgment in favor of a Texas title company and vacated FinCEN’s “Residential Real Estate Rule” nationwide.

FinCEN’s rule, finalized in 2024 and effective March 1, 2026, required certain professionals involved in residential real estate closings involving entities or trusts to submit detailed reports to the federal government. These reports were designed to combat money laundering by identifying the beneficial owners behind shell companies purchasing real estate.

The Texas court concluded that FinCEN exceeded its statutory authority under the Bank Secrecy Act, rejecting the agency’s attempt to treat broad categories of non-financed transactions as inherently “suspicious.” As a result, the court vacated the rule in its entirety and issued relief with nationwide effect.

Following the decision, FinCEN issued an alert confirming that:

• Reporting obligations are not currently in effect, and
• Covered parties are not subject to liability for failing to report while the order remains in force.

In other words, title companies, settlement agents, attorneys, and others who would have been “reporting persons” can pause compliance efforts for now.

As of now, there is no clear indication that an appeal has been filed, but multiple sources note that an appeal is expected and likely forthcoming. Given the nationwide impact of the ruling and conflicting decisions from other federal courts upholding the rule, the case appears headed toward the Fifth Circuit, and possibly beyond.

For real estate professionals and lawyers:

• The rule is currently unenforceable, but that status could change quickly.
• An appeal could revive compliance obligations on short notice.
• It may be prudent to maintain internal systems and readiness, rather than dismantling compliance infrastructure entirely.

The Flowers Title decision is a significant setback for FinCEN’s effort to regulate cash real estate transactions. But it is almost certainly not the final word. For now, the rule is suspended, but practitioners should assume this is a pause, not an ending.