Notice of Appeal Filed Following Vacatur of FinCEN Residential Real Estate Transfers Rule

As we reported in our March 2026 alert, FinCEN’s Anti-Money Laundering Regulations for Residential Real Estate Transfers Rule (the “Rule”) was vacated by the U.S. District Court for the Eastern District of Texas just weeks after going into effect. The result of this decision is that the Rule was rendered without legal effect nationwide. In our prior report, we noted that an appeal was widely expected. On May 11, 2026, FinCEN, through the U.S. Department of Justice, filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit. Following the notice of appeal, FinCEN published an updated FAQ sheet on its website to provide guidance for real estate professionals in light of the ongoing litigation. 

Pending results of the appeal, the Rule remains inapplicable nationwide, and “Reporting Persons” under the Rule are not subject to liability for failing to file Real Estate Reports for otherwise reportable transfers. Importantly, FinCEN has now clarified that “[i]f the court’s order is overturned and the RRE Rule again becomes legally effective, reporting persons will not be required to file reports for covered transactions that would have been required to be reported while the court’s order was in force.” This is a helpful clarification for any real estate professionals who have taken a cautious approach in the interim, continuing to collect information on transactions that would otherwise be reportable.

However, the situation remains highly fluid. As we also noted in our March 2026 alert, the Texas ruling is in tension with a decision from the U.S. District Court for the Middle District of Florida, which upheld the Rule. That Florida decision has since been appealed to the Eleventh Circuit, setting up the potential for a circuit split that could be decided by the Supreme Court. Pending further decisions on the Rule, real estate professionals should continue to familiarize themselves with the Rule in the event it is reinstated. For further information, read our August 2025 alert, which details various requirements within the Rule, such as what constitutes a reportable transfer, who is the Reporting Person, what must be disclosed, and what transactions are exempt.