Careers

Experiences

Industries

Offices

Our Firm

Pages

Our People

Updates

Practices

Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

A federal district court has issued a significant decision vacating FinCEN’s residential real estate reporting rule, which had taken effect on March 1, 2026. This update summarizes the rule, the court’s ruling and the practical implications for affected parties.

core/paragraph

core/heading

As discussed in our <a href="https://www.wnj.com/updates/new-fincen-reporting-requirements-for-residential-real-estate-transactions-take-effect-march-1-2026/" target="_blank" rel="noreferrer noopener">earlier alert</a>, FinCEN adopted a final rule requiring reporting for many non-financed residential real estate transactions involving transfers to legal entities or trusts. The rule applied broadly across the United States, with no minimum dollar threshold, and required reporting of detailed information about the transaction, the parties and beneficial owners.

The rule was intended to address perceived money laundering risks in all-cash residential real estate transactions by increasing transparency in this segment of the market. The rule imposed new compliance obligations on parties involved in closings and settlements, including title companies and other real estate professionals.

Court Decision Vacating the Rule

On March 19, 2026, a federal district court in Texas issued a decision vacating (i.e., setting aside) the rule in its entirety. The court held that FinCEN exceeded its statutory authority under the Bank Secrecy Act. In particular, the court concluded that the statute permits reporting requirements only for “suspicious” transactions, and FinCEN failed to justify treating all covered, non-financed residential real estate transactions as suspicious.

The court also rejected FinCEN’s alternative argument that it had broader authority to impose general reporting requirements, finding that the statute does not authorize such sweeping obligations. As a result, the court vacated the rule nationwide.

FinCEN has publicly confirmed that, in light of the court’s order, reporting persons are not currently required to file real estate reports and will not be subject to liability for failing to do so while the order remains in force.

What This Means for Clients

FinCEN’s current stay on enforcement may only be temporary if the court’s decision is overturned on appeal. Transactions closing while the order is in effect need not comply with the reporting requirements, but clients should be prepared to comply should the rule be reinstated prior to closing.

We recommend monitoring developments closely until this case is resolved or until FinCEN itself vacates the rule or significantly restricts it, as was done with the Corporate Transparency Act last year. We will continue to track this matter and provide updates as warranted.

Please contact us if you would like to discuss how this development affects your business or specific transactions.

Private Client and Family Office

Partner

Rachel J. Foster

Sara A. Nicholson

Associate

Caryn Hannapel

Corporate

Family Law and Divorce

Real Estate

Trusts and Estates

Update: Court Vacates FinCEN Residential Real Estate Reporting Rule

Warner Norcross + Judd LLP is responsible for the contents of our advertising and this website. Please read our full <a href="/privacy-policy/" aria-label="see privacy policy">privacy policy</a> available on our website. If you have any questions or comments about our website or our Privacy Policy please contact us at <a href="mailto:info@wnj.com">info@wnj.com</a> or 616.752.2000.