Dear Clients and Friends:
You may have recently received notice regarding an important update to the Financial Crimes Enforcement Network (“FinCEN”) Residential Real Estate Reporting Rule (the “RRE Rule”) following a federal court decision in Texas.
The RRE Rule, which became effective on March 1, 2026, required reporting to FinCEN for transfers of residential real estate to trusts or entities (such as corporations, partnerships, and LLCs) where the transaction was not financed by a lender subject to anti-money laundering requirements. These reports included detailed information from both sellers and purchasers.
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Court Decision and FinCEN Guidance On March 19, 2026, a federal district court in Texas vacated the RRE Rule in its entirety, concluding that FinCEN exceeded its statutory authority under the Bank Secrecy Act. In response, FinCEN updated its guidance to state: “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.” |
What This Means
At the present, the practical effects are straightforward, though the bigger picture continues to evolve:
- No Current Filing Requirement
Real estate reports are not required to be filed at this time. - No Liability for Non-Filing
Reporting persons are not subject to liability for failing to file while the court’s order remains in effect. - Future Reporting Uncertainty
FinCEN’s guidance does not indicate whether transactions occurring on or after March 1, 2026, may need to be reported if the rule is reinstated or replaced.
Important Considerations
- Potential for Appeal or Reinstatement
FinCEN may appeal the decision, and reporting obligations could be reinstated with little notice. - Regulatory Uncertainty
The legal landscape continues to evolve, and additional guidance or rulemaking is possible. - Continued Focus on AML Compliance
Regulators remain focused on increasing transparency in the U.S. real estate transaction to prevent money laundering.
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Practical Guidance Out of an abundance of caution, we recommend that all parties continue capturing relevant transaction and ownership information and be prepared to resume reporting promptly if required. At this time, no reports should be filed unless and until FinCEN requires such filings. |
We are actively monitoring developments and will continue to keep you informed as additional guidance becomes available. If you have any questions about how this update may affect your business or specific transactions, please contact your Hinman, Howard & Kattell attorney.
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This information is not legal advice and may not be suitable for all client situations. This Client Alert provides general information and does not outline all of the important considerations related thereto.
This Client Alert is not a substitute for legal guidance regarding program details and how those may be applicable to your business. As always, if we can be of assistance with this topic or any other matters, please do not hesitate to contact your HH&K attorney.
Client Alert Date: April 9, 2026
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| John E. Jones Partner E: jjones@hhk.com |
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| Kenneth F. Tomko Partner E: ktomko@hhk.com |
Other Related Articles
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Client Alert – The New FinCEN Real Estate Reporting Requirements Explained
March 2, 2026
Real Estate Agent Guide to FinCEN Real Estate Reports
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Copyright © 2026 by Hinman, Howard & Kattell LLP. This Client Alert is provided as a general information service to clients and friends of Hinman, Howard & Kattell, LLP. It should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. These materials may be considered Attorney Advertising in some states.